January 11, 2022
5 mins

Benefit from 130% capital allowance – but only until March 2023

Zara Farr
Digital Accountant

From any small to medium enterprise, every penny counts. They say look after the pennies, and the pounds will look after themselves. Well, what if we told you that there’s a way for you to make money while spending money? Sounds too good to be true, right? Well, it’s not, and for a limited time only, you can earn 30% more than you usually would. Read on to find out more.

What is a capital asset?

In a nutshell, capital assets are significant investments for your business. If we go into greater detail, they refer to any assets that will benefit your company over a long period, generally for longer than two years. Your capital asset could take the form of an investment or a piece of equipment.

What is capital allowance tax relief?

Capital allowance tax relief is available to limited companies and enables them to deduct the full price of capital assets from their profits to the limit of £1million. This results in paying less tax for the year. Yup, you read that right. You can claim back 100% of your purchase, and it is a claim that HMRC is happy for you to make.

Examples of capital assets

  • Laptop, computer, printer or similar equipment.
  • Fire alarm and fire fighting system.
  • Office furniture.
  • Air conditioning.
  • Advertising signage.
  • Office furniture.
  • Solar panels.
  • Tools.
  • CCTV equipment and burglar alarm system.
  • Company motorcycle or vehicle, including electric charging points.
  • Bathroom suite or kitchen refit, including white goods.
  • Storage equipment.
  • Electrical systems.
  • Company phone systems.
  • Refrigeration units.

And more.

That’s a lot of spending, right? Well, here’s the secret on how you can get all of this essentially for free. Not only that, you can effectively earn money by investing in these capital assets now.

How to benefit from the 130% capital allowance superpower

But it gets even better! From 1st April 2021 until 31st March 2023, limited companies that invest in new capital assets can deduct 130% of the product cost from their profits.

And it gets EVEN BETTER! HMRC has scrapped the £1million limit, so you can claim 130% on all of the capital assets you invest in within that time period.

The only catch is that not all capital assets are covered in this offer, although the list of assets that qualify is considerably long.

Get advice from Gravitate Accounting

If you’re a limited company and have been considering investing in new equipment, now is the time to act! Get in touch with our tax consultant, to find out if your investment will be covered by the 130% capital allowance superpower and how to claim it.

Zara Farr

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