The Chancellor of the Exchequer confirmed in the Budget yesterday that the Coronavirus Business Interruption Loan Scheme (CBILS) is ending this month. Therefore, businesses have until 31st March 2021 to submit their applications for CBILS - backed Hire Purchase or Term Loan facilities available via JCB Finance if they wish to benefit. Successful applicants will then have up to six months to drawdown the loans from receiving the offer letter.
Super-deduction – Corporation Tax relief up to 130%
Also announced yesterday a new ‘Super-deduction’ providing 130% tax relief on most new plant and machinery investments made from 1st April 2021 until 31st March 2023. The full cost plus a further 30 percent is deductible against corporation tax in the year they were bought, accelerating the tax relief rather than the tiered writing down allowances (WDA) normally applied over several years. H M Treasury say the super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest.
Annual Investment Allowance (AIA) – tax relief up to £1 million
The AIA continues at heightened level of £1 million until 1st January 2022, giving business longer to benefit from the relief of £1 in taxable profits for every £1 spent on qualifying expenditure. So, sole traders, partnerships and those business that would not pay corporation tax also have an incentive to invest as the UK recovers from the pandemic. This also provides companies purchasing used assets an opportunity to benefit.
All qualifying purchasing of JCB’s, plant, machinery or commercial vehicles are likely to be eligible for some form of enhanced relief, including those purchased using Hire Purchase (HP). These additional tax savings will also apply to those who secure a CBILS facility for drawdown within the qualifying periods.
Click more details on CBILS-baced facilities via JCB Finance.
JCB Finance is not a tax or financial advisor - always seek advice from your accountant or finance director, because every business' circumstances are different. Businesses should not make investment decisions purely on a tax basis - there should be a compelling business case for the investment. UK business users only, terms apply.
The Coronavirus Interruption Loan Scheme (CBILS) is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Visit british-business-bank.co.uk.
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