super-deduction tax

How does Super-Deduction apply to leasing?

Starting 1st April 2022 until March 2023, companies that invest into new plant and machinery assets can gain from the Super-Deduction tax benefits. This meaning that they can take full advantage of the 130% tax breaks. You can find out more about the scheme here.

We are accustomed to speaking about the tax benefits of dental finance. However, these conversations have shifted ever since the introduction of the new Super-Deduction.

During this blog, we will outline how the new version of the Super-Deduction scheme might affect you.

Can I claim Super-Deduction tax relief on a finance agreement I take out?

Yes! You can! A hire purchase agreement has the same tax policies as if you were paying upfront for the asset. Therefore, enabling you to take advantage of the 130% tax breaks.

Can I claim Super-Deduction tax relief on a finance agreement I take out?

Yes! You can! A hire purchase agreement has the same tax policies as if you were paying upfront for the asset. Therefore, enabling you to take advantage of the 130% tax breaks.

Can I get Super-Deduction relief on a lease rental or hire agreement?

Unfortunately not. This is because you do not have title of the equipment in these instances. Nevertheless, you are able to offset all of your lease payments against your profits by using the annual capital allowances you can reduce your tax bill this way.

How does this affect the investment in the UK?

The super deduction scheme is predicted to boost UK capital equipment investment by 10% in 2022. Although, a fraction of this will just be companies bringing forward investments from future years. Saying that, here at WestWon Dental, we have already seen a significant rise in clients looking to take advantage of the scheme.

Will the use of business funding increase due to the scheme?

Yes. It is highly anticipated that the use of business finance will surge this year. There is also belief that companies will shift from lease rental, to hire purchase. This only makes sense due to the huge tax breaks that hire purchase provides accompanied with the super-deduction scheme.

What about leasing and the financing of non-qualifying assets?

Particular assets do not qualify for the super-deduction tax relief. For example, surgery fit outs come under this umbrella unfortunately. Aspects of the fit out will qualify, such as furnishings. However, if the asset is part of the composition of the building, the tax guidelines will be different.

With regards to these non-qualifying assets, you’ll be pleased to know that you can still claim some sort of tax break on a lease rental or commercial loan. Furthermore, we can support you by creating a finance agreement tailored to your needs. We can make your agreement the most tax efficient by dividing the project into two. Therefore, we will look to take a lease purchase agreement on your qualifying assets and then a business loan for those non-qualifying assets.

Get in Touch

Contact us to for more information on the super-deduction tax scheme and how it may benefit your business. Our expert team can provide you with the best advice and support on how you can make the most of the scheme. Call us on 01494 611 456, or, send an email to hello@westwon.co.uk.

 

 

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WestWon Dental is a trading name of WestWon Limited. The Financial Conduct Authority (FCA) regulates financial services in the UK and you can check this on the Consumer Credit Register by visiting the FCA’s website here or by contacting the FCA on 0800 111 6768. WestWon Limited is a credit broker and not a lender. WestWon companies deals with a range of lenders. All WestWon companies hold a current Data Protection Licence and are registered for VAT. These details, together with our policy on Treating Customers Fairly, Complaints Policy and address details are held under our Get In Touch page.
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