Check if you can claim super-deduction or special rate first year allowances

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 only claim these allowances if you are a company. Check what allowances you can claim as a sole trader or trust.

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

Get help to check if you can claim and how much you can claim

You can get help to understand:

• if your expenditure qualifies for the super-deduction or special rate first-year allowance
• how much relief you may be entitled to

This does not cover every eventuality. Before you claim, you must check that:

• you comply with all the rules for these reliefs
• that your claim has been worked out correctly

Depending on your circumstances, you may want to seek professional advice before making a claim.

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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.

Find an example of when a business can claim the super-deduction.

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):

• integral features
• thermal insulation added to existing buildings
• solar panels
• assets with a useful life of at least 25 years — find out more about items with a long life

Find an example of when a business can claim the special rate first year allowance.

Work out what you can claim

You should check how much you can claim before submitting your tax return.

Source: HM Revenue & Customs