To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the Super Deduction capital allowance introduced in Budget 2021 on investment in people and skills.
11 March 2021
Budget 2021 announced that from 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will benefit from both the 130% super-deduction and a 50% first-year capital allowance.
Expenditure on qualifying plant and machinery capital investments used by a company in the course of a trade can qualify for the relevant first-year allowance, including fibre cables. Software can also qualify for the super-deduction, provided the company makes an election to remove software from the intangible fixed assets regime. Expenditure on the learning and development of staff does not qualify for the super-deduction but is already an allowable expense for tax purposes.