Super deduction tax incentive - Atlas Copco UK
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Super deduction tax incentive

Following the super-deduction announcement made in the April 2021 budget, the two years up to 31/3/2023 are a great time for UK manufacturers to invest in new plant and machinery, including air compressors, low pressure blowers, dryers, chillers and industrial gas generators.

What is the Super-Deduction?

The super-deduction started on April 1st 2021 and will run for 2 years until March 31st 2023 . It means that businesses can claim 130% first-year capital allowances against their corporation tax for main rate plant and machinery investments. 

This is a great incentive for UK manufacturers to invest in the latest, energy efficient compressed air, process cooling and industrial gas technologies, which will not only improve productivity compared to competitors who use older equipment, but also positively affect the company’s long term sustainability and profitability. 

Can you give me an example of super-deduction for air compressors?

If you invest £100,000 in air compressors you can deduct £130,000 (130% of the initial investment) from taxable profits. As the current UK corporation tax rate is 19% you will save 19% of £130,000 on your corporation tax bill which equals £24,700. In this example it effectively saves about a quarter of the purchase price. Use our calculator to check other amounts.

Who is eligible?

Companies within the charge to corporation tax on or after 1st April, 2021. 

If you have already contracted the purchase it will not be covered. Likewise, if you are drawing down equipment from an existing umbrella agreement it is not covered.

Super Tax Deduction Calculator

Use our Super Tax Deduction Calculator below to find out how much you could save!

Super Deduction Calculator | UK Tax Calculators
Super Deduction Calculator
How Much Do You Save?
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How to find out more?

Read more UK Gov guidance: https://www.gov.uk/guidance/super-deduction

Read the British Compressed Air Society fact sheet

Financial advice 
Please note this article does not provide any investment, financial, or tax advice. We advise businesses to consult with their own legal and financial advisors and tax experts.

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