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Computer Software: Capital Allowances

Question for Treasury

UIN 165538, tabled on 9 March 2021

To ask the Chancellor of the Exchequer, whether he plans to make investment in software eligible for the Super Deduction allowance.

Answered on

12 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.

Answered by

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