A ‘super-deduction’ allowance incentivising companies to invest in new plant and machinery does apply to foodservice operators buying the latest kitchen equipment, the government has confirmed.
As revealed by FEJ yesterday, the scheme offers a 130% capital allowance and a 50% first-year allowance for qualifying special rate assets, enabling firms to cut their tax bill by up to 25p for every £1 they invest.
More details of the scheme have been released here, with the government announcing that it will start from 1 April 2021 and run until 31 March 2023.
The news has been welcomed by the Foodservice Equipment Association, which said it fully supports its Net Zero Carbon plans.
Emma Brooks, chair of FEA Net Zero Carbon Forum, said the scheme does apply to foodservice operators buying commercial catering equipment – so long as the appliance is new.
One concern for FEA is that, with more second-hand equipment on the market, foodservice operators buying an appliance might opt for that rather than a new, energy efficient model.
“The super-deduction incentive is great news for the Net Zero Carbon plan, because there is no incentive to choose second-hand when the buyer gets a 130% tax credit on new equipment,” suggested Ms Brooks.
In addition, she said the 50% first-year capital allowance offered a further incentive to buy new, more efficient equipment that will help to meet the industry’s carbon reduction targets.
Meanwhile, the chancellor announced a consultation on R&D tax credits for manufacturers.
The FEA is hoping that this, too, can be used to back its Net Zero Carbon plan for the foodservice industry.
“One of our key points was to incentivise manufacturers to develop more energy efficient appliances,” said Brooks. “We will be taking part in the consultation with a view to including energy efficiency as a key criterion in the R&D tax credit scheme.
“Meeting the hospitality industry’s carbon reduction targets is a huge challenge. The proposals outlined in the Budget are a big step forward and endorse key elements that the FEA has requested. This is very good news.”