My fellow partners and I are looking to undertake some capital investment in order to expand our business activities. However, as we have left this until after the 31 December 2021 cut-off for the increased annual investment allowance, we are considering making a claim using the super-deduction instead. However, we are unsure whether this is the best option as we have heard that there can be issues the assets sold later on. Is that correct?
The super-deduction is actually a red herring as it is only available to companies. As a partnership, you wouldn’t be able to claim it unless you incorporated prior to incurring the expenditure. Whilst this may make commercial sense, there is some good news that means you don’t have to do this. The increased annual investment allowance of £1 million has been extended to 31 March 2023, so you haven’t missed the cut-off. Of course, you may wish to go down the incorporation route to secure relief at 130%, so it is worth doing some sums before making any decisions.