Farmers are being reminded of the 'super deduction' capital allowance, which allows companies to claim 130% relief on the acquisition of most new plant and machinery.
The new two-year 130 percent capital allowance was announced in March during Chancellor Rishi Sunak's spring budget speech.
Key points to consider for eligibility for the super deduction include that assets being acquired must be new and unused.
It covers capital expenditure on qualifying plant and machinery from 3 March 2021 to 31 March 2023.
Peter Harker, partner at accountant Saffery Champness, said the super deduction measure was designed to encourage capital expenditure.
"It permits all companies subject to UK corporation tax to claim 130% capital allowances on qualifying plant and machinery which would normally be relieved at 18% per annum," he said.
The super deduction differs to the Annual Investment Allowance (AIA), which allows companies to deduct the full value of the first £1m of qualifying expenditure from its profits before tax.
Writing down allowances (WDAs) are then claimed on any expenditure in excess of this limit.
The £1m AIA has been extended to 1 January 2022, and is suitable for businesses purchasing second hand assets which do not qualify for the super deduction.
Mr Harker added: “There will be times when the super deduction cannot be applied but where the AIA is available.
"Qualification for the super deduction and AIA also differs so it is important that the right approach is used."
