What does this mean for my dental practice?
This is excellent news for limited companies wishing to invest in new equipment and technology.
For purchases up until 31 March 2023, Ltd companies that pay corporation tax will be eligible to offset 130% of the asset value against their taxable profit in the first year.
Super-Deduction key point summary:
- Eligible for expenditure incurred before 31st March 2023.
- Relevant for companies that pay corporation tax but not sole traders, partnerships, or LLPs.
- Assets must be new, that is not second-hand or used.
- 130% Super-deduction capital allowance is available on all qualifying plant and machinery investments that fall within the AIA.
- Great news for practices, trading as Ltd Companies, wishing to invest in
equipment, shop-fit and technology. - Whilst assets acquired under a lease are not eligible for the super-deduction, other forms of asset finance such as Loans, Hire Purchase and Long Funding Leases* are available.
*Subject to clarification from HMRC
Example 1 – £25,000 investment
Asset (net) cost: £25,000
Tax relief with super-deduction: £6,175 (previously £4,750)
This is calculated as follows: £25,000 x 130% x 19% = £6,175 which
equates to 24.7p tax relief for every £1 investment.
Example 2 – £50,000 investment
Asset (net) cost: £50,000
Tax relief with super-deduction: £12,350 (Previously £9,500)
This is calculated as follows: £50,000 x 130% x 19% = £12,350 which
equates to 24.7p tax relief for every £1 investment.
GOV.UK has published an article on the Super-deduction, which can be found by clicking the button below.
Anglian Dental are not tax advisors and you should always seek professional guidance from an Accountant or tax advisor when considering business investments.
