How the Super Deduction Tax Scheme can benefit your next office fitout or refurbishment project

As restrictions lift, many businesses are rethinking their office space and how they can enhance it to support new ways of working. Future workspaces will need to be a place that employees love to go to. A space that supports collaboration, socialisation, creativity and interaction, where technology is an enabler and supports a new flexible way of working, and where the experience enhances the brand…a destination.

The new Super Deduction Tax Scheme announced in the 2021 budget will be welcome news for those considering an office fitout or refurbishment project which may not necessarily have been budgeted for.

What is the Super Deduction Tax Scheme?

The Super Deduction Tax Scheme offers businesses a 130% tax allowance against qualifying plant and machinery investments made from 1 April 2021 until the end of March 2023.

Why is the Government introducing a Super Deduction Tax Scheme?

Since the pandemic, pre-existing low levels of business investment have fallen further, with a reduction of 11.6% between Q3 2019 and Q3 2020. Much of the UK’s productivity gap with competitors is attributable to our historically low levels of business investment compared to our peers. Weak business investment has played a significant role in the slowdown of productivity growth since 2008.

By making capital allowances more generous, business investment is encouraged. As a result, this can promote economic growth and counter business cycles. This scheme will provide businesses with a strong incentive to make additional investments, and to bring planned investments forward.

What do the new capital allowances offer?

As a result of measures announced at this Budget, businesses will now benefit from four significant capital allowance measures:

  • The Super-deduction – which offers 130% first-year relief on qualifying plant and machinery investments until 31 March 2023 for companies
  • The 50% First-year Allowance (FYA) for special rate (including long life) assets until 31 March 2023 for companies
  • Annual Investment Allowance (AIA) providing 100% relief for plant and machinery investments up to its highest ever £1 million threshold, until 31 December 2021
  • Within Freeport tax sites, companies can access new Enhanced Capital Allowances (ECA+) and companies, individuals and partnerships can benefit from an increased level of Structures & Buildings Allowance (SBA+) for investments until 30 September 2026.

Seeking professional advice

We advise that you seek independent financial advice from a qualified practitioner to find out more about how your business will benefit from the Super Deduction Tax Scheme.

If you would like to find out more about how your workspace can be adapted to support new ways of working, get in touch with a member of our team here.