IoD calls for extension of capital allowances super-deduction

The Institute of Directors (IoD) has called on the government to extend the capital allowances super-deduction.

Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from new first year capital allowances.

Under this measure a company will be allowed to claim:

  • a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
  • a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.

The relief is not available for unincorporated businesses.

Data published by the IoD found that the super-deduction has had ‘a positive and measurable impact’ since it was introduced at Budget 2021. 13% of firms reported that the super-deduction had had a direct impact on their level of investment undertaken between 2021-23. For half of these businesses, it was entirely new investment as a direct result of the super-deduction.

The business group is urging the government to make the super-deduction permanent.

Kitty Ussher, Chief Economist at the IoD, said: ‘It is wrong to look at declining overall levels of business investment in recent months and conclude that the super-deduction has not worked. Instead, our data shows that even less investment would have taken place if the super-deduction did not exist.’

Need help with your accounts? Please do not hesitate to contact us.
Blue Spire

Blue Spire

We're Here For you

Let's talk

Our friendly team are ready to help you and answer any questions you may have. Just use the form below and get in touch.

Scroll to Top