Super deduction capital allowances – what it means for you

Earlier this month on 3rd March 2021, the UK tuned into the new Budget where Chancellor of the Exchequer Rishi Sunak laid out our financial roadmap for the year ahead. Of the various support given to buoy capital spend by businesses, the ‘super deduction capital allowances’ stood out.

In the hope of kickstarting investment and business growth post-pandemic, super-deduction will allow companies to claim a 130% first year allowance (FYA) for investments into items of plant and machinery acquired between 1st April 2021 and 31st March 2023.

This article is going to explain what super dedication capital allowances means for you in the context of spray booths and the automotive, industrial, commercial and aerospace industries. Continue reading for more.

Super deduction need-to-knows

What is covered under plant and machinery?

So, from 1st April 2021 to 31st March 2023, companies can claim 130% FYA to help with and encourage investment in main rate pool plant and machinery. But what does that specifically mean?

Well, it includes more obvious examples of plant and machinery like manufacturing equipment, machines, computers and the bigger items of machinery that are built into properties. One example, of course, is spray booths along with other paint finishing essentials such as paint mixing rooms and cure ovens. Conveyors and automated paint systems would also be applicable. Not forgetting services, like compressors with air ring mains or dust extraction turbines.

Investing in spray booths and spray booth equipment
With the super reduction capital allowances, you can upgrade your current spraybooth booth setup or, if required, invest in a new booth altogether.

You will be even happier to hear that alongside the 130% FYA is an additional 50% FYA for expenditure on special rate pool items of plant or machinery. This includes integral or additional features/equipment. Get in touch for more information on the eligible Junair equipment.

Other conditions to keep in mind

  • Both allowances apply only to companies who pay corporation tax.
  • The 130% super deduction and 50% FYA apply only to plant and machinery that is new and unused.
  • The 130% super deduction and 50% FYA do not apply to second-hand plant and machinery.
  • The relief is in accordance with accounting periods that straddle 1st April 2021 and 31st March 2023.
  • There is no expenditure limit on either the 130% super deduction or 50% FYA.

There are also some exclusions

While both the super deduction and FYA are generous as tax and business growth incentives, there are some exclusions that you should keep in mind in case they apply to your business.

  • Both allowances are only available to companies, not sole traders, LLPs or partnerships.
  • Both allowances are also only available for contracts entered into after 3 March 2021. Any projects that have already been committed to before or during the course of the pandemic, and that may have been mothballed only to receive the allowances, will not qualify.
  • The allowances are not available to landlords who are investing in the construction of new property or the refurbishment of existing premises.
  • Cars are excluded. However, vehicles that are not deemed cars are eligible (i.e vans, motorbikes, generally any vehicle used for trading purposes that is not a car).

‘Capital allowance pools’ explained

If you’ve done even the slightest bit of research into the above and you’re weighing up its benefits for your business, you’ll have come across ‘pools’ that are essentially a way to categorise a business’ government allowance potential.

Here, we’re going to define which pools relate to which goods so that you can make a clearer and more informed decision.

The three types of pools and their qualifying allowance rates are:

  • Main rate pool with a rate of 18% (all plant and machinery)
  • Special rate pool with a rate of 6% (additional assets that would be considered integral to the building like lifts, air conditioning, solar panels etc; items with a long life; thermal insulation of buildings.
  • Single asset pools with a rate of 18% or 6% depending on the item (items you use outside the business, for example).

We can help advise on the above during the purchase process, so you won’t have to worry about the specifics too much at this stage.

Invest in your business growth with super deduction relief

It’s clear that business growth is being prioritised to aid the economic recovery of the UK, and the above allowances should go a long way to help the economy and also drive the expansion of your company.

For more information, please get in touch and we can provide further guidance on the allowances. If you’re looking to purchase spray booth equipment for automotive, industrial, commercial or aerospace purposes, then you will definitely want to take advantage of the super deduction allowances.

Written by

Junair launch their electrically powered, carbon neutral spray booth

Monday 13th September 2021, Heywood, Lancashire Junair has always been the leading spray booth company when it comes to energy reduction, ultimately saving carbon emissions since 2002. It has won awards for both Junair EcoActive and the Junair 4 Series for energy reduction performance. As part of Junair’s long term commitment to the removal of […]

Read More

How robotics can save a business time and money

Despite a shrinking workforce, industrial manufacturers and aircraft producers have a significant need for faster lead times in order to stay competitive and satisfy operational challenges. They are sometimes pushed to do more with less. Introducing painting robots into your finishing process will save floor space, boost production, and enhance finish quality, all while allowing […]

Read More

The materials and processes used in plane construction

Have you ever wondered what goes into the manufacturing of the Boeing 787 you’re about to jump on for your next holiday across the big pond? Well, allow us to elaborate with our guide to the materials and processes used in plane construction.  At Junair, we provide paint finishing equipment solutions to an array of industries, […]

Read More

Junair announces the launch of their new logo

Jason Douglas and Angus Trenholme continue to lead the growth and direction of Junair Spraybooths Ltd following the recent retirement of two long standing Directors.  Angus and Jason wanted to mark this milestone, within both long established and new markets, so the decision has been taken to refresh Junair’s visual identity with a new logo. […]

Read More

Who needs a spray booth?

A spray booth is a regulated environment where spray paint can be applied to vehicles with control. The purpose of the spray booth is to boost productivity and improve paint quality while keeping employees safe from the hazardous materials used.  Without the use of a spray booth, spray painting alone can result in overspray; a […]

Read More

The health benefits of automated spray booths and how they can help your business reduce occupational health risks

Engineering and manufacturing companies have reaped the benefits of the advances in modern technology, particularly in regards to spray booths. It is not only the ingredients and chemical safety of the paints that have evolved, but the application from the spray booths themselves as well.  Not only are they required for your employees’ safety, but […]

Read More

The types of spray booth filter you should consider

Spray booth filters don’t come in one size fits all. There are many options which fall under two subtypes which include air extraction and air input. Air extraction filtration means filtering the air, removing the paint, varnish, glue, dust or other airborne particles before it leaves your booth. Air input filtration is the process of […]

Read More

Dismantling the fear-mongering around robotics overruling jobs

“Unexpected item in bagging area” – A pretty well-known phrase in today’s supermarkets, but prior to the last decade, this was a fairly new technology. As we moved into a more automated society, self-checkout was probably the first directly noticeable replacement of humans by robots. As the popularity grew, by 2013, there were 191,000 self-checkout […]

Read More

Common causes of contamination in spray booths

When it comes to automotive refinishing, contamination is a common issue that can significantly impact the quality of your work. However, contamination is easy to resolve if you know what to look out for. From dust and debris to poor spray booth preparation, we can help you achieve a quality finish on your next spray […]

Read More
Blog

Read our latest news and insights from around the spray booth industry.

Find out more
Case Studies

Read about some of our latest client projects.

Find out more
Downloads

Take a look at some of our downloadable resources.

Find out more

If you have a new project that you would like some help with, call us on +44 1706 363 555 to speak to a member of our team about your requirements. We will take you through our project process step-by-step, whether you are redeveloping an existing site or building a new facility, Junair can help.