From the 1st April 2021, businesses can access new, temporary tax reliefs on qualifying capital asset investments, including increases in relief on plant and machinery expenditure. The so-called ‘super deduction’ will run until the end of March 2023, making the next two years the perfect window for investment in power resilience and management solutions.
First revealed in the Spring Budget, the 130% ‘super deduction’ has been introduced to incentivise investment as the UK begins the process of recovering from the economic impacts of the COVID-19 pandemic. The deduction will allow companies to cut their tax bill by almost 25p for every pound invested in new equipment, with only new and unused equipment purchases being eligible for the deduction. Additionally, only contracts entered into after 3rd March 2021 will qualify.
In total, the relief is expected to benefit UK businesses by around £20 billion across the two-year period it will be in effect. The Office for Budget Responsibility have described the relief as moving the UK from 30th in OECD rankings for business investment to 1st. For any business already considering investing in new equipment, including energy solutions, it is not an opportunity to be missed.
With no cap on the relief, businesses that have already explored power resilience solutions or other energy management technologies, or are planning to implement them further along the line, are now strongly incentivised to act promptly. Figures issued by the Treasury demonstrate that for a large project totalling £1 million of qualifying expenditure, the super deduction would allow a deduction of £1.3 million on calculating taxable profits. With corporation tax currently sitting at 19%, the project would net a £247,000 reduction on their tax bill.
Powerstar’s turnkey service and market-leading expertise in implementing Behind-the-Meter power resilience systems make us the perfect partner to deliver a technology solution that delivers to your exact specifications. Managing every stage from design and planning through to installation and aftercare, you can be confident that your project will be delivered on time, on budget and carefully implemented to best address your particular energy strategy priorities.
Demand for battery energy storage solutions with uninterruptible power supply (UPS) capabilities that allow greater flexibility for your energy use is already surging, with a growing number of customers seeing the benefits in terms of reduced disruption, lower energy costs and a cut in carbon emissions. The business case for enhancing power resilience has already been clearly made, with an additional, substantial discount to your corporation tax bill offering yet another reason to invest in your energy security.
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