Is the purchase of new tanks allowable under the super deduction allowances?
Firstly, what is super deduction?
The super-deduction and special rate first year allowance temporarily increase reliefs for companies on qualifying expenditure on plant or machinery from 1 April 2021 to 31 March 2023.
Secondly, what are the rules?
The main considerations for super deduction are:
It is only available to companies;
For expenditure between 1 April 2021 – 31 March 2023
The plant & machinery must be new (not second-hand);
Not on the list of exclusions (eg cars);
It is not available to companies who would use the assets to hire or lease out;
A lower rate of 50% applies in the case of long life assets (those with a useful economic life of more than 25 years)
So, do the tanks qualify as plant and machinery for the purposes of the capital allowances legislation?
The definition has built up over the years based on case law which has established guiding principles. Generally, it should be fairly straightforward to identify assets which perform a function in the business (and are therefore plant or machinery for capital allowances) as opposed to being part of the setting in which the business is carried out (generally this will be buildings and structures which are not eligible for plant or machinery capital allowances).
