With everything going on, the government’s temporary tax relief on capital expenditure was a welcome relief when it was announced during the pandemic. But the opportunity to take advantage of the scheme is rapidly running out of time as it finishes on the 31st March 2023.
In practical terms, it is a great opportunity for a businesses looking to expand their large format printing operation or to replace machines that are becoming obsolete. The support is a significant opportunity for any company seeking finance and looking to invest in new kit, such as a JETRIX LED UV Printer. While there is an emphasis on ‘qualifying expenditures’ the government website is clear which in summary means there is:
- A super-deduction providing allowances of 130% on most new machinery investments that ordinarily qualify for 18% main rate writing down allowances
- A first year allowance of 50% (FYA) is available on most new machinery investments that ordinarily qualify for 6% special rate writing down allowances and is available for expenditure incurred on special rate (including long life) assets
What are the conditions for the Government’s Tax Relief Scheme?
Well obviously any scheme like this is not going to be without its own specific restrictions. However, we feel they are realistic, relatively easy to understand and practical:
- The expenditure is incurred by a company within the charge to corporation tax
- The machinery must be new and unused
- The expenditure must be incurred before 01 April 2023
- The asset is not used for leasing
You also need to be mindful that any assets that have been claimed under the super-deduction, will have their disposal value for capital allowance purposes affected. If you want to know more then check out the government’s website for more details.
What is eligible?
From a large format printer perspective, these terms cover most capital equipment/apparatus kept for use in the business. Apparently the usual situation is that machinery is generally split between ‘main rate’, ‘special rate’ and ‘non-qualifying’ assets. Again, there is some high-level guidance on what counts as plant and machinery on the government’s website. To help the HM Treasury have also published a factsheet on the super-deduction outlining more specific details which may be helpful.
How is the temporary tax relief on capital expenditure worked out?
The equation is: unit price x 130% x 19% less this figure = discounted price. However, probably the easiest way to look at this is to take a real examples from our JETRIX printer range:
- Take a JETRIX LXi8 LED UV Flatbed Printer this starts with prices from about £182,200. Less £45,003 which means the actual cost when taking advantage of the scheme is £137,197!
- Or the JETRIX LXiR320 LED UV Roll to Roll Printer priced from £74,700. With the scheme you could benefit from a tax relief allowance of up to £18,450 which would make the actual cost from £56,250.
So this saving is great news if your business is considering investing in a large format LED UV printer, but time is of the essence. If you are thinking the time is right, then reach out as we would happily discuss what your options are and how we could help you make this happen.
