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New super-deduction for new heavy and light commercial vehicles could save fleets 25p for every pound invested

New super-deduction for new heavy and light commercial vehicles could save fleets 25p for every pound invested

HMRC have confirmed that fleets investing in new and unused heavy and light commercial vehicles can claim a 130% "super-deduction" tax relief, or a 50% first-year allowance for qualifying special rate assets from April 1, 2021, to March 31, 2023, as announced in the Budget.

It is important to note that company cars do not qualify for these plant and machinery tax deductions. 

Formerly, super-deduction qualifying new plant and machinery expenditure would receive a main rate writing down allowance of 18%, or special rate writing down allowance of 6%. 

In the Budget 2021 factsheet, the Treasury said, “Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p”.

The BVRLA said, “The association asked for a supercharged “Green Investment Allowance” in our representation for Budget 2021. We were glad to see HM Treasury using this mechanism for all plant and machinery. While this does not apply to cars or leasing, it does include chargepoints. We will continue to lobby for the extension of super deductions to leasing”. 

Please find here answers from the HM Treasury in response to the following questions from the BVRLA: 

How does the 130% impact Plant & Machinery currently with a 100% FYA (first-year allowance)?
Does the 130% super deduction apply to vans and HGVs?
Can super deductions be applied to Contact Purchase type agreements?

We at Marshall Leasing are delighted to hear that the BVRLA will be lobbying for the extension of super deductions to leasing and trust that you find this information useful. 

We understand that many fleet decision-makers will be reviewing their fleet needs as they prepare to restart after the lifting of the current lockdown restrictions. If you would like assistance from our team of experts, please get in touch with us at info@marshall-leasing.co.uk or by calling 01480 414541. 

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Marshall Leasing is a trading division of N.I.I.B. Group Ltd a company registered in Northern Ireland under company NI3721, whose registered office is situated at 1 Donegal Square South, BELFAST, BT1 5LR. N.I.I.B. Group Limited is authorised and regulated by the Financial Conduct Authority