You can claim tax relief of 130% on the purchase of IT hardware until 31 March 2023

If you’re considering upgrading your IT hardware and equipment then now is a good time to do it as any qualifying purchases made for two years from 1 April 2021 will be able to take advantage of a new super-deduction allowance of 130%.

This is one of the most attractive tax incentives that the British government has ever offered and is designed as is aimed at getting British businesses spending again and investing more in order to boost the country’s economic recovery over the next few years. 

Your business is eligible if you invest in any assets from a list of plant and machinery that the government has produced. Included on this list are computer equipment and servers. Such purchases would normally qualify for the 18% rate of capital allowances, but purchases made in the two years from 1 April 2021 will qualify for a rate of 130%.

What does this mean in practice?

If your business spends £10,000 on qualifying equipment such as computers or servers you’ll be able to claim a deduction of £13,000 against your taxable profits (130% of the cost of your initial investment) which will then reduce the amount of corporation tax due.

Talk to us today about planning your requirements

All this means that if you’re planning any upgrade of your existing IT hardware or investment into new hardware then now is a good time to do it. Bear in mind that some IT supply chains are still disrupted due to the pandemic so it’s a good idea to plan ahead and think about what you might need for your business over the next few years. Talk to us today about how we can help you plan your requirements effectively.