The UK government has introduced full expensing, which offers 100% first-year relief on qualifying new main rate plant and machinery investments from 1st April 2023 until 31st March 2026.
Full Expensing can be between 19p and 25p tax saving for every £1 invested on new plant and machinery.
What is the benefit of full expensing (FE)?
- Full expensing allows companies to write off the cost of investment in one go, cutting their taxes by up to 25p for every pound invested.
- This measure aims to boost business investment, which has been a long-standing weakness in the UK compared to the OECD average.
What is capital allowance?
- Capital allowances are a type of tax relief for businesses that allow them to deduct some or all of the cost of an item from their profits before paying tax.
- Different types of capital allowance include Annual Investment Allowance (AIA), Writing Down Allowances (WDAs), First-Year Allowances (FYAs), and Structures and Buildings Allowances (SBAs).
If you’re considering upgrading your equipment and investing in the future of your outlet, this is the time to do it. Take advantage of the tax break now.
Combined with Foster and Gamko’s award-winning interest-free credit scheme which allows you to pay for your equipment over 12, 18 or 24 months, all while its working for you, now is a great time to invest in reliable, state-of-the-art refrigeration.
What products/companies are applicable to ‘FE’?
- Full expensing is available to companies subject to Corporation Tax only, and the plant and machinery must be new and unused.
- Tangible capital assets other than land, structures, and buildings used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances.
What happens if you sell the ‘FE’ product?
- When a company sells an asset on which it has claimed either full expensing or the 50% first-year allowance, it must pay back a proportion of the tax relief received.