Manufacturers urged to take advantage of Super-deduction tax boost to accelerate Net Zero ambitions

The Government’s recently announced tax relief scheme will allow manufacturers to accelerate their journey to Net Zero, with an energy financing specialist urging businesses not to miss out on the opportunity it offers.

Capitas Finance says the Super-deduction tax, which was introduced in Chancellor Rishi Sunak’s 2021 Spring Budget, provides the ideal opportunity for manufacturers to invest in energy efficient plant and machinery assets, which would not only boost productivity but also help carbon conscious organisations meet their sustainability ambitions.

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets are able to offset this against taxable profits. This can be done through the 130% super-deduction first year capital allowance or a 50% first year allowance for qualifying special rate assets. The introduction of the temporarily increased tax reliefs allows businesses to cut their tax bill by 25p for every £1 invested.

Faster tax relief

Capitas Finance believes it is an opportunity environmentally conscious manufacturers cannot afford to miss as most tangible capital assets, including energy efficiency and renewable energy technology, are considered plant and machinery for the purposes of claiming the Super-deduction tax. The kind of assets that manufacturers could invest in includes (but are not limited to):

• Solar panels
• Electric vehicle charge points.
• Refrigeration units.
• Compressors.
• Tractors, lorries, vans.

Darren Riva, CEO of Capitas Finance, commented: “We understand that manufacturers across the country have committed themselves to more sustainable methods of manufacturing in order to reduce their environmental impact. Many are now looking at the investments they can make to drive their business forward. The introduction of the Super-deduction tax provides an ideal opportunity for them to accelerate their Net Zero journey which is why we are urging organisations to make the most of this scheme.

“However, we also understand that some businesses may be put off due to a lack of access to investment funds. As a specialist energy solutions finance company we can help remove the barriers to energy finance. We’re here to help these businesses on their transition to net-zero, and by working closely with customers we can offer solutions that will help them achieve their goals and deliver a competitive advantage.”