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Where Taxpayers and Advisers Meet

Super Deduction Capital Allowance

Joined:Tue May 11, 2021 12:22 pm
Super Deduction Capital Allowance

Postby Ryk » Wed Sep 08, 2021 1:32 pm

Trying to fathom out the final actual cost after tax and/or allowances for purchasing an allowable item. For example, a small limited company business wants to buy a new PC for say £5000. Using a super deduction calculator the saving is £1235. In addition the VAT is claimable that's £1000.

Is it correct therefore that the actual cost after all these is £2765 (£5000 minus £1000 minus £1235) ?

Is the item permitted to be categorised as an expense which therefore reduces corporation tax (assuming you are making a profit) ?

If within 2 years the item goes faulty can it be written off with zero value? Is it worth claiming the super deduction if the item instead can be categorised as an expense whereupon VAT is reclaimed and it reduces corporation tax by 20% and if instead purchased in 2022 tax year it reduces corporation tax by 25% ?

Interested to get a definitive answer what is the best way to purchase such items.

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