What, (you may ask), is the ‘super-deduction’? Put simply, the super-deduction allows your company to claim back up to 25p for every £1 you invest in ‘qualifying’ equipment assets.
The super-deduction tax opportunity runs until 31 March 2023; after that date, there is a planned corporation tax rise, so don’t delay.
The super-deduction enables dental practices to invest in the business and write this equipment off within the first year. This reduces the pre-tax profits, which may ultimately reduce the tax liability more than ever before. However, this is depending on your circumstances.
From a tax planning perspective, a Hire Purchase agreement has the same tax allowances as if you are paying cash for an asset. This enables the qualified asset to take advantage of the 130% tax break.
Super-deduction tax for dental practices
On the other hand, the super-deduction does not apply to leasing. This is because you do not have title of the equipment as it is a lease rental. However, as a slight aside, you are able to offset all the rental payments against profits using the annual capital allowances to reduce your tax bill (visit https://www.gov.uk/capital-allowances/annual-investment-allowance for further details).
As a dedicated dental finance broker, we are perfectly placed to offer you the correct support and advice you may need. Also, there are many important terms and conditions attached to super-deduction. Do speak to your account manager. This is to ensure the super-deduction is the best way for you to take advantage of any available tax breaks.
In the first instance, I would suggest you download WestWon’s Dental Finance App. Or contact WestWon Dental for us to support any purchases you are considering. We can then provide you with the calculators required to enable you to make the right decision with your accountant.