The announcement of an increase in Corporation Tax to 25% was met with obvious dismay from across industry, but for manufacturers that want or need to invest in new capital equipment the rise has a silver lining. The first-year 130% tax relief provided by the Government’s super-deduction scheme, introduced in April 2021 and applicable to any new equipment with unlimited value, now provides a bigger investment incentive.
“When applied to the new Corporation Tax rate, customers can make significant savings on new machine tools,” states Nigel Atherton, managing director of XYZ Machine Tools. For example, the purchase of a machine tool valued at £100,000 would generate tax relief of £130,000, at the old rate of Corporation Tax, saving the customer £24,700. With the tax rate at 25% that saving increases to £32,500. If a company kept the £100,000 of profit in the bank it would cost £25,000 in tax instead.
For further information www.xyzmachinetools.com