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Should you buy new equipment or vehicles before 5th April?

If you are running a profitable business and making up accounts to 31 March or 5 April, you could consider buying plant and machinery or commercial vehicles to reduce your 2020/21 tax liability.

You can get up to 100% as a tax deductible write-off, for equipment or commercial vehicles used in your business.

Tax relief on cars is not as generous, but there is a special 100% tax relief if you buy a new car that emits no more than 50g CO2 per kilometer. However you need to move quickly though because from April 2021 100% tax relief will only apply where the car has zero emissions.

It is always a good idea to think about capital investment such as this prior to your year-end date, and it is wise to talk to your accountant, to ensure you get the dates right and properly understand the likely tax savings you will receive.

It is sometimes less wise to let the tax-tail wag the dog – we generally only advocate capital investment, if the item you are buying will bring a positive financial return to your business overall.

 

This information is provided free of charge and in good faith, without acceptance of any future liability arising from any action or in-action by any recipient or reader.Please feel free to share this information as widely as possible and encourage people, who might benefit from these updates, to register at www.asquithand.co.uk for future updates.

 

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