A capital allowance programme encouraging firms to invest in the latest machinery post-Covid could turbo-charge sales of energy efficient foodservice equipment if, as thought, it is extended to the catering sector.
The “super-deduction” scheme, which was unveiled in yesterday’s Budget, means that companies investing in qualifying new plant and machinery assets will be able to claim a 130% capital allowance and a 50% first-year allowance for qualifying special rate assets.
According to the government, the super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.
Details on the mechanics of the initiative are still light, but it will run from 1 April 2021 until 31 March 2023.
FEJ contacted the Treasury this morning for clarification on whether the tax incentive applies to catering equipment purchases, but it is being interpreted that way within the industry.
Jack Stein, chef director at Rick Stein Restaurants, said he would certainly look to benefit from it: “I really like the idea of the super-deduction for investment. This will definitely stimulate our sector as hospitality looks to reopen. From investment in outdoor spaces to kitchen equipment, this is a really positive step.”
The UK’s Foodservice Equipment Association is expected to release a statement on the situation today, having earlier called on the government to consider its five-point plan to support the move to net zero carbon by 2050.
The super-deduction allowance would appear to support its ideas for replacing inefficient equipment with carbon-friendly equipment through measures such as a manufacturer tax credit scheme, a scrappage scheme for old equipment and incentives to promote appliances on the Energy Technology List.
Yesterday, the government said that pandemic-related economic shocks and the accompanying uncertainty have chilled business investment.
It hopes the super-deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.