Super-deduction and special rate first year capital allowances are temporary allowances you can claim on the cost of qualifying plant and machinery.
Special rate first year allowance is also known as SR allowance.
You can claim these allowances if all of the following apply:
- your company is subject to Corporation Tax
- you incurred the expenditure on or after 1 April 2021, but before 1 April 2023
- you did not buy the plant and machinery due to a contract you entered into before 3 March 2021
Check if your plant and machinery will qualify
Plant and machinery are tools of the trade, kept permanently for the use of the business. What counts as plant and machinery will depend on the nature of your business.
Find out more about what counts as plant and machinery.
To make a claim for super-deduction or special rate first year allowances, the plant and machinery must:
- be new and unused
- not be:
- given to you as a gift
- a car (other vehicles may qualify for the super-deduction) — find out about claiming capital allowances on cars
- bought to lease to someone else (unless it is background plant or machinery within a building)
- purchased in the accounting period the business activity ceases
If your plant and machinery is used in ring fence trades
You cannot claim super-deduction for plant and machinery used wholly or partly within a ring fence trade.
Find out more about capital allowances you can claim for a ring fence trade.
If you lease background plant and machinery
If you’re a property lessor, you may be able to claim for background plant or machinery in leased buildings. These assets are installed in various types of buildings to make them usable and include (but are not limited to):
- lighting
- wiring
- central heating
You cannot normally claim for plant and machinery within homes you let out.
If your plant and machinery are hire purchases
You can only claim for capital expenditure incurred on your hire purchase agreement.
You can normally make a claim if you:
- hire the plant and machinery for use in your business, without transfer of ownership, in return for regular payments
- are entitled to take ownership of the plant and machinery if the terms of the contract are followed
If the asset has not been brought into use for the business (but is still expected to be), you can normally claim allowances on the capital element of the instalments you have incurred.
When you bring the asset into use, you can normally claim allowances on the capital element of all future instalments straight away.
Check what may qualify for the super-deduction
You can only claim super-deduction for main rate plant and machinery.
Main rate plant and machinery is plant and machinery that is not special rate. Find out more about rates of capital allowances.
Plant and machinery that may qualify for the super-deduction includes (but is not limited to):
- machines such as computers, printers, lathes and planers
- office equipment such as desks and chairs
- vehicles such as vans, lorries and tractors (but not cars)
- warehousing equipment such as forklift trucks, pallet trucks and stackers
- tools such as ladders and drills
- construction equipment such as excavators, compactors, and bulldozers
- some fixtures such as kitchen and bathroom fittings and fire alarm systems
Integral features do not qualify for the super-deduction but may qualify for the special rate first year allowance.
Check what may qualify for the special rate first year allowance
You can only claim special rate first year allowance for special rate plant and machinery. Find out more about rates of capital allowances.
Plant and machinery that may qualify for the special rate first year allowance includes (but is not limited to):
Work out what you can claim
You should check how much you can claim before submitting your tax return.
