Scottish companies urged to capitalise on underused tax breaks
Scottish businesses are being encouraged to make the most of “highly attractive” tax breaks, as they are missing out on millions of pounds, according to an accountancy firm.
Firms should “use or lose” the range of tax super allowances introduced in the Spring Budget 2021 to encourage capital investment, Azets believes.
It is pointing out how such allowances include the super deduction, a 130 per cent first-year allowance for expenditure on main pool qualifying assets such as machinery, furniture, fittings, computers, and the enhanced 50 per cent special first-year allowance for integral building assets like electrical, water and heating systems.
Azets added that the breaks are available until March 31, 2023, and are in addition to the existing annual investment allowance that permits 100 per cent relief for up to £1 million of expenditure incurred each year on qualifying plant and machinery assets, and which ends on the same date.
However, Mark Pryce, tax partner with Azets in Scotland, said the uptake has been very low and Scottish firms are missing out on millions of pounds of tax relief – while business investment is key to catalysing long-term growth and productivity.
“The low uptake of both super allowances is down to a lack of awareness of the incentives coupled with general uncertainty over the economy,” he said. “That said, the super allowances incentives are some of the most generous investment incentives ever created – and we would encourage business owners to take full advantage before they are gone.”
Azets recently issued a call for company bosses to review their strategies, after finding that business failures are most likely during the first half of the year.