Tim Parr

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Tim Parr


The super-deduction: why 130 per cent?

Without this special 130 per cent super-deduction relief, many businesses might have been tempted to defer capital expenditure in the hope of saving 25 per cent tax, by claiming capital allowances after April 2023. Not wanting to give businesses any excuse not to invest, the Chancellor sensibly introduced the super-deduction. It cannot be a coincidence that 130 per cent of 19 per cent is 24.7 per cent. A super deduction of 131.58 per cent would have looked very odd! 

It also means there’s no basis for calls to extend the super-deduction beyond 1 April 2023 when the 25 per cent corporation tax rate will begin to apply to the more profitable companies.

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