CAN I USE THE 130% CAPITAL ALLOWANCE FOR SURVEYING EQUIPMENT?

There has never been a better time to buy Survey Equipment!

On 3rd March, the UK government brought in new temporary tax relief on qualifying capital asset investments.

Does the capital allowance include surveying equipment? You bet it does.

Rishi Sunak heard that Geomax is so good at improving productivity that he felt it was important to allow construction companies, surveyors and archaeologists to work more efficiently to help the country recover from covid.

Or something like that: “the measure is designed to stimulate business investment. It does so by increasing the incentive to invest in plant and machinery by offering higher rates of relief than were previously available.”

How do I take advantage of the new capital allowance?

To benefit from these first-year allowances, the expenditure must be incurred on or after 1 April 2021 and on or before 31 March 2023.  It will not apply where a contract has been entered into prior to 3rd March 2021.

This measure will temporarily introduce increased reliefs for expenditure on plant and machinery. For qualifying expenditures incurred from 1 April 2021 up to and including 31 March 2023, companies can claim in the period of investment:

1. A super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances.
2. The first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances.

Here’s an example:  a company makes a profit of £250,000 before deducting capital allowances and spends £100,000 on qualifying assets. Taxable profits would be £250,000 less 130% x £100,000 – so £120,000. Previously taxable profits would have been £150,000 and so the tax saving is £30,000 at 19% or £5,700.

It is only available to limited companies, not sole traders.

Other Option: Hire Survey Equipment

Even with this government help, buying might still not be the right option. As discussed, sole traders don’t qualify, and anyway, you might decide that you don’t want to take on the initial expenditure or your project might be short and you don’t want to end up having to store the unused equipment afterwards.

There are several benefits to hiring:

1. Reduced upfront costs

2. Always enjoy the latest equipment

3. No responsibility for the upkeep of the equipment. 

4. Automatic replacement if equipment fails

Or why not lease it?

OK, you can’t take advantage of the capital allowance, but your accountant will tell you that leasing comes with its own advantages. You can spread payments over time so that you can pay for the kit with your increased productivity. We can introduce you to our partners at Lattitude Leasing who will be able to explain all the different options:

1. Finance Lease
2. Hire Purchase
3. Operating Lease
4. Refinance
5. Commercial Loans
6. Invoice Finance

Whatever you go with, we always provide free support and demonstrations with the equipment because it’s important to us that you feel you’ve made the right choice. The choice to switch to Geomax and #BuildBackBetter or at least build more efficiently...

For more detailed information on the capital allowances, you can visit the government website: https://www.gov.uk/government/publications/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021