Super-deduction 130% Capital Allowances – ending 31st March 2023

Super-deduction 130% Capital Allowances – ending 31st March 2023

The 2021 Spring Budget introduced two types of enhanced allowances for companies incurring capital expenditure from 1 April 2021 to 31 March 2023. But for organisations with a year-end other than 31 March 2023, expenditure will need to be incurred earlier than that in order to get the full 130% deduction.

What are the two types of allowances?


The Super-Deduction is an enhanced 130% first-year allowance for new plant and machinery expenditure that would have qualified for main rate allowances at 18% such as furniture, machines and computers; and

Special Rate Allowance

The Special Rate Allowance is a 50% first-year allowance for expenditure that would have qualified for the special rate pool allowances at 6%, such as electrics, lighting, heating and solar panels.

What are the criteria for meeting the enhanced allowances?

The relief is conditional on meeting the following points:

  • Brand new, unused;
  • The asset cannot be onward leased;
  • Acquired after 1 April 2021 (and ordered after 3rd March 2021);
  • Acquired before 31 March 2023; and
  • Not a car

As we are entering into the final period during which a company can claim a super-deduction, one point to note is that the full super deduction rate of 130% is only available for accounting periods ending before 1 April 2023.

For accounting periods ending on 31 March 2023, the super-deduction will remain at 130% for qualifying expenditures incurred before the year-end.

However, for accounting periods ending after 1 April 2023 the rate of the first year allowance reduces depending on the number of days falling before and after 1 April 2023.

Time is running out to ensure any qualifying items are acquired by 31stMarch 2023

Get in touch

If you would like further information on these areas please contact one of the team.