Full Expensing

Unleash Business Growth: Harness Full Expensing in the UK

In the vast landscape of tax deductions that businesses navigate, an exceptional opportunity stands out prominently—Full Expensing. This distinct advantage offers a remarkable proposition: enabling companies to leverage a complete 100% deduction on all expenditures tied to the acquisition of plant and machinery.

This initiative, unveiled during the Spring Budget 2023, was specifically tailored for corporations liable to pay Corporation Tax, ensuring its exclusivity to this subset of entities. Importantly, this beneficial provision is slated to retain its effectivity, serving as a valuable resource for eligible firms, until the culmination of March in 2026.

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Understanding Full Expensing

Fundamentally, Full Expensing simplifies the process of tax relief. It empowers businesses by facilitating immediate deductions for specific capital expenditures incurred during the fiscal year.

The Extension and Permanence

The UK Government’s 2023 Autumn Statement brought welcome news by solidifying the extension and permanence of Full Expensing. This strategic move aims to ensure prolonged stimulation of investments, fostering sustained business growth.

Eligibility and Benefits Revealed

This benefit is accessible to all sizes and sectors of UK corporations subject to corporation tax. It not only bolsters cash flow but also encourages capital asset investments, offering a dual-pronged advantage for businesses. It ignites productivity, efficiency, and facilitates job creation.

Full Expensing vs. the Super Deduction

A significant distinction lies between Full Expensing and its predecessor, the Super Deduction. While the Super Deduction granted an unlimited 130% allowance for qualifying plant and machinery purchases, Full Expensing provides a 100% first-year allowance.

Real-world Impact and Savings

Consider a scenario where a company invests £1.5 million in advanced machinery to enhance production capacity in 2024. Under Full Expensing, the entire £1.5 million becomes deductible within the same tax year. This equates to potential tax savings of £375,000 (£1.5 million x 25%) in 2024. These increased cash reserves empower companies to reinvest the savings for further operational enhancements or strategic investments.

Long-Term Strategy and Support

The implementation of Full Expensing, coupled with the 50% first-year allowance for special rate expenditure, presents an exceptional opportunity for meticulous, long-term capital expenditure planning. Should detailed information about Full Expensing or assistance in navigating the claim process be necessary, our team is readily available. Get in touch for personalized guidance and expert support. Unlock the immense potential within your business through Full Expensing. Contact us today to explore how this tax relief scheme can fuel your growth trajectory.