As the window for companies to use the government’s 130% ‘super deduction’ is due to close before the end of March, it is important to consider whether any projects can be accelerated so that expenditure is incurred before the deadline.

To qualify for the 130% deduction, expenditure on Plant and Machinery has to be bought new, rather than second hand. Some examples of assets that will qualify for the 130% deduction are:

  • Computer equipment and servers
  • Vans, lorries, tractors (but not cars)
  • Office chairs and desks
  • Ladders, drills etc
  • Electrical vehicle charging points
  • Refrigeration units

For integral features, such as solar panels, lifts, escalators and air conditioning systems, there is currently an enhanced expenditure claim of 50% that will reduce back down to 6% after 31 March 2023.

To qualify for either super deduction (130% or 50%), payment must become unconditional by 31 March 2023, and must be due for payment within four months of becoming unconditional.

Theoretically this means that as long as you have a contractual agreement in place by 31st March 2023 to pay off the full amount of the asset, and be using it by 31st July 2023, the full amount of the asset will qualify for the super deduction.

If however, payment due dates fall beyond four months the expenditure is considered to be incurred on the payment date.

While the super deduction is still and has been beneficial for limited companies, tax benefits should only be one factor in a company’s capital expenditure process. Therefore whilst the acceleration of capital expenditure may be sensible, the decision to do this shouldn’t come solely from a tax benefit point of view.

If you have any queries, please do not hesitate to contact our Tax Manager:

Cody Goldsbrough


The above information is for guidance only. We recommend that you contact us for advice before acting on any of the information and we cannot accept responsibility for any action taken without such advice.