The super-deduction enables companies that invest in qualifying new plant and machinery to benefit from a 130% first-year capital allowance.
The policy kicked in on 1 April 2021 and allows companies to cut their tax bill by up to 25p for every £1 they invest in qualifying business assets.
Investing companies will also benefit from a 50% first-year allowance for qualifying special-rate (including long-life) assets.
In the UK’s manufacturing sector, research suggests that most companies are planning to raise investment levels in 2021/22.
A study from Make UK found 23% of companies plan to increase investment levels, while 28% are speeding up investment plans.
However, 49% said the super-deduction would not incentivise them to raise their investment plans or their plans were too rigid.
The policy was announced in the Budget on 3 March 2021, with the Office for Budget Responsibility expecting it to boost company investment by 10%.
Verity Davidge, director of policy at Make UK, said: “The Budget made a clear impact on manufacturers in terms of confidence and they are stepping up their plans to invest.
“For too long the UK’s investment performance has been below par and the [super-deduction] incentive should provide a boost in the short-term at least.”
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