Super Deduction UK

[Gogs]

Never a better time to buy a electric through a LTD company. 130% allowance on corp tax!

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[torx]

Assume this is if you purchase it outright? I have mine coming on lease.

 

[GuitarSlinger]

Never a better time to buy a electric through a LTD company. 130% allowance on corp tax!

You sure EVs like this will qualify? Rather than literal "plant and machinery" in the manufacturing sense. Also how far can you role the tax break ahead, as the headline rate doesn't alter until 2023, the tax would be payable september 2024. Don't get me wrong hoping you're right, and 130% of value at 19% corpration tax is a great incentive as it is.....

 

[Gogs]

Yeah definitely available. As long as the invoice is date post 1st April. If leased, you can claim the whole amount. Just received an email from my accountant. Unfortunately for me I bought mine Sept 20.

 

[torx]

Yeah definitely available. As long as the invoice is date post 1st April. If leased, you can claim the whole amount. Just received an email from my accountant. Unfortunately for me I bought mine Sept 20.

Thanks. Will have to speak to the accountant about it.

Was supposed to be getting the car this month but was told today has been delayed so won't receive it till next month.

Not sure exactly what 130% allowance is and how it would work on a lease though.

 

[Gogs]

Before super deduction the cost of the car can be fully claimed against corp tax. Just like you bought a truck or some other plant/machinery to run the business. Now your going to get an extra 30%.

 

[GuitarSlinger]

Sorry to ask - u mentioned lease? My understanding (based in previous 100% WDA for EV’s) was that the company had to own the vehicle, so a straight lease where the asset is not held on the balance sheet did not count. As opposed to an HP agreement, or even a PCP from Porsche...contract details depending.

Bit topical for me and business partner as we are looking to change and it just seems to be a no brained to go for an EV. 2 x Taycan’s at about £250k would equate to more like £325k worth of deduction. Thus reducing tax bill by 61.75k at 19%....or 30 grand reduction on each car. ...or offsetting the finance charge for 2 years in effect.
Fag- packet maths granted. But seems like a major incentive.

 

[Fuzzy80]

Yeah definitely available. As long as the invoice is date post 1st April. If leased, you can claim the whole amount. Just received an email from my accountant. Unfortunately for me I bought mine Sept 20.

I’m not sure if your accountant has been too quick out of the blocks on this one.

my understanding is motor cars are exempt

 

[bootsie]

Yes, I was looking at this too (early upgrade?) but I haven't seen any definition of "qualifying equipment" yet.

 

[Gogs]

Seems accountants may have different opinions until maybe more details become available.

 

[4SJB]

We had a long conversation about claiming capital allowances for a leased or PCP car. Porsche finance think it is possible to write off the cost of the car against corporate profits, but could not come up with detail when pushed. I am yet to see a comment from anyone on the forum that has managed to write down the cost of a car that is not an outright purchase.
Once we get the detail I will be looking into ending my PCP early and buying a long roof outright.
The other major force for UK Government is encouraging the swap over to EVs and as vehicles bought by companies are still a major percentage of total sales, there must be the need for more tax breaks. The future looks bright!!

 

[GuitarSlinger]

Explanatory Note - Super Deductions

Just found this lads. I'm not sure cars are allowed. If you google the reference on page 2, note 3.
"46(2) of CAA 2001"


The expenditure is incurred on the provision of a car (as defined by section 268A).

[General exclusions 3 and 4 omitted by FA 2013, s. 70(1).]

Definitely not wanting to be mr Buzz Kill. But i'd be doing some more digging on it.

 

[TomC]

Whether the 130% is included or not doesn’t matter to me. With corporation tax at 25%, as long as they’re continuing to offer the incentives around electric cars, you can be sure I’ll be getting a Taycan Turbo S and electric Macan next year, and the year after. And the one after that, as good things come in threes.

 

[mandoyoda]

My accountant spoke with their specialist advisor, who said super deduction can only be applied to an outright purchase, or the final balloon payment on PCP (monthly payments are treated as a lease, so you don't own the car until the balloon payment it made).

Cars have been excluded from Super deduction. I've asked my accountant for clarification if electric vehicles are included or excluded. At the very least, there is full rate corporation tax relief.

I'm not an expert, so please reach out to your accountants for clarification on super deduction.

Searching reveals Section 45D of the CAA 2001, which suggests electrically propelled cars qualify for the first year expenditure, as they have low (zero) CO2 emissions. However, Section 46 seems to contradict it. I'm no expert on interpreting legalese.

Section 45D:

Section 46:

 

[mandoyoda]

My accountant confirmed electric vehicles are excluded from super deduction.

If you purchase using PCP, you can claim full rate corporation tax and half VAT on the lease (benefit of better cash flow), then you can only claim corporation tax on the balloon payment. If you purchase outright, then you can claim corporation tax on the cost of the car (you'll save on interest).

https://www.accountingweb.co.uk/any-answers/super-deduction-applicability

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