The Government has recently announced that a £1 million tax break to stimulate investment in UK industry and support business confidence is to be extended until 1st January 2022.
This means that businesses can continue to claim up to £1m in same-year tax relief for capital investment in plant and machinery for another year. The £1m cap, introduced as a temporary measure from January 2019, was originally due to revert to £200,000 on 1st January 2021, but can now continue to be claimed throughout 2021.
This move is intended to boost confidence as companies look to weather the pandemic and plan for the future.
Financial Secretary to the Treasury Jesse Norman said:
It is vital that we support business through the difficult months ahead. Extending the Annual Investment Allowance’s £1 million cap will give businesses the confidence they need to invest into next year, helping them to grow whilst benefitting the wider economy too.
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This is good news for businesses and farmers looking to invest in capital projects such as renewable energy installations. With this extended tax relief, businesses can continue to benefit from the economic advantages that renewable energy initiatives such as solar PV or air source heat pumps can provide. For example, attractive grants are available that can provide up to 50% savings on installation costs. In addition to a significant reduction in energy bills, businesses can expect an overall return of around 10-12% and an average payback of 6 years.
In the current pandemic crisis, Businesses all over the UK are having to make changes to the way they work, reduce costs and maintain competitiveness to support their recovery. We know that investing in renewable energy makes environmental, social and economic sense to make 2021 the beginning of a green recovery.
If you’re interested in saving money on your commercial energy bills, whilst also reducing your business carbon footprint, talk to us today – we’d love to hear from you.