If you are a UK business and have been considering upgrading your commercial refrigeration to True, time is running out to benefit from the super-deduction UK tax rules.
Have you invested in new commercial refrigeration equipment since April 2021? If so, you too can benefit from the super tax deduction as you can backdate claims.
This tax allowance of 130%, currently replaces the 18% main rate writing down allowance, meaning you can save thousands of pounds on upgrading to new kitchen appliances. Only applicable from the 1st of April 2021 to the 31st of March 2023, there is still time to upgrade or backdate and benefit from this saving.
What is the ‘Super Tax Deduction’?
The super-tax deduction allows companies to cut their tax bill by up to 25p for every £1 they invest.
The reason for the introduction was to encourage investment in new productivity-enhanced plant and machinery assets, to help companies grow and be more profitable. It also provides the opportunity to bring planned investments forward, which helps to promote economic growth and counter business cycles.
Unfortunately, the 130% ‘Super Deduction’ isn’t available for sole traders or partnerships, and the expenditure will only qualify if incurred by a company.
Most tangible capital assets used within a business are considered plant and machinery, for the purchase of claiming capital allowances. However, here’s a brief list of some items which are included:
- Commercial Refrigeration units
- Office chairs and desks
- Ladders, drills and cranes
- Tractors, lorries and vans
- Computer equipment and servers
Businesses choosing to invest in qualifying new (cannot be second-hand) plant and machinery assets, such as commercial refrigeration, will be able to claim:
- 130% super-deduction capital allowance on qualifying investments
- 50% first-year allowance for qualifying special rate assets
If you’re unsure if you’re able to claim, you are able to check by visiting the Gov.UK website.
How it works for commercial refrigeration
For every pound your company invests in new commercial refrigeration and freezers, its taxes will be cut by up to 25p.
We’ve put together an example below to demonstrate:
- If you were to spend £2,500 on a new True refrigerator
- Your corporate tax deduction will be £3,250 (i.e., 130% of your original investment)
- Deducting £3,250 from your taxable profits will save your business up to 19% of that
- 19% of £3,250 is £617.50, which is how much corporation tax you save if you qualify
If you were to upgrade your entire coxmmercial kitchen, your total saving will continue to increase based on the investment cost you put in.
This saving is even more worthwhile, considering that from April 2023, the rate of tax companies pay will be increased from 19% to 25%.
Value in upgrading your refrigeration equipment to True
Outside of saving on corporation tax, there are plenty of other reasons you should upgrade your commercial refrigeration with True.
Improved energy efficiency
Due to the amount of time you’ll have commercial refrigerators, you want to ensure you’re not spending more than you need to in powering them. Older units are likely to be less energy efficient — sometimes much less — and with electricity costs continuing to skyrocket, this factor can make a huge difference to your energy bills.
When purchasing your refrigeration, you need to consider not just the cost of the equipment, but also the operating costs over the lifetime of owning the product.
To help you see the savings you can make by switching to more energy efficient refrigeration from True, we have an energy cost calculator that provides an estimate of the pounds and pence savings you can benefit from.
Ensure you’re environmentally friendly
Outside of saving on running costs by upgrading to new units, you’ll also be doing your bit for the planet. As more and more consumers become mindful of where they choose to eat, you’ll want to show them you’re doing your bit for the environment by opting for ‘greener’ processes, supply chain and equipment (including your choice of refrigeration).
At True, we don’t just develop refrigeration products with natural refrigerant gases, but the way in which we manufacture and operate our facilities is with a goal to limit and offset our negative impact on the planet.
Reduce repair costs with longer warranty
When something goes wrong, every second of downtime costs your business. In older refrigeration, where issues are more likely to rise, having a warranty still in place can reduce stress while saving on business costs.
At True, we provide as standard, a five year parts and labour warranty, so you’ll have confidence that if something goes wrong, it’ll be fixed, and you won’t have to pay out.
Not just meeting, but exceeding legislation
Choosing a new True refrigeration product means having confidence that your product doesn’t use unfriendly refrigerant gases, and exceeds legislation and performance standards. This would help you to future-proof your business.
Since 2015, in the UK and Europe, environmentally damaging refrigerant gases have been banned from sale under the F-Gas Regulation. When you purchase a True refrigerator today, you can be confident that not only is it operating with environmentally-friendly refrigerant gases, but it is also working to limit your energy bills, and protects you against repair bills for many years to come.
Our calculator also provides relatable greenhouse gas equivalency metrics to assist with your carbon reduction goals, allowing you to compare the environmental impact of available products.
All of our commercial refrigeration, from uprights to glass doors, are also registered with the EPREL (European Product Database for Energy Labelling), a EU Government led source of verifying that products (including commercial refrigeration) meet Minimum Energy Performance Standards. UK legislation is still aligned with the same testing Standards (post BREXIT), so while no UK equivalent database exists today, it is where we recommend customers go to confirm that products they are considering for purchase, meet all the current legislation.
Importance of choosing True
As business costs continue to rise, taking advantage of this tax reduction will not only help you to upgrade your refrigeration products, but offset rising energy costs.
If you have questions about True’s energy efficiency, get in touch with a member of our team today, or visit our website to see our full range of commercial refrigeration for your business.
To check if your company is eligible to benefit from this saving, and upgrade your commercial refrigeration, visit the Gov.UK website today.
