BUSINESSES thinking about investing in new machinery or plant should consider bringing forward their longer term purchasing plans to take advantage of the Government's new Super Deduction Tax Scheme, a finance expert has said.
The programme will allow firms to make purchases of up to £1 million on qualifying equipment until March 2023 which can be offset against their tax liability.
It means that for every one pound a company invests, their taxes are cut by 25p.
Karina Gallagher, managing director of Ulverston-based Hornby Commercial Finance, said the scheme provided a significant financial benefit for firms looking to purchase new equipment or retool their business.
“Retooling, replacing machinery or investing in new equipment can be a big expense that businesses will build into their longer term planning,” she said.
“However, this scheme provides a worthwhile incentive to make those purchases now to take advantage of the savings that will come with them at the end of the tax year.
“Affordable commercial finance deals are available at the moment to make sure businesses don’t miss out on this opportunity, particularly when new machinery or retooling will lead to their continued future growth.”
The Super Deduction Tax Scheme was launched by Chancellor Rishi Sunak to ensure capital allowances for businesses remain competitive with other countries around the world.
It will apply to new, not used, machinery, plant and equipment.
Hornby Commercial Finance was launched in 2017 by Karina Gallagher in partnership with JF Hornby Ltd. It has delivered in excess of £5 million in funding to the local business community in the last 12 months despite the global Covid-19 pandemic.
“The economic landscape in this area has remained strong throughout Covid in a number of sectors because of our advanced manufacturing and supply chain industries,” added Ms Gallagher.
“But without the front line relationship teams they once had on the ground, commercial lenders don’t have the detailed knowledge of businesses to be able to understand their lending risk in the context of confident economies like ours.
“My role involves building these relationships with both the business community and the national lenders and acting as the interface between the two. It’s also about being able to match a business to the most receptive lender, often working collaboratively with local professionals, to get the right deal in place.
“For firms planning on making an investment in machinery, now is the time to explore the options, even if it means doing it a year or two earlier than anticipated, to take advantage of this temporary opportunity.”