ACCOUNTANCY SERVICES
FEATURE
TAX RELIEF FOR ENERGY-SAVING TECHNOLOGY For a number of years there has been a generous 100% tax break for businesses that install energy-saving technology in their premises. This is in addition to the £200,000 annual investment allowance for plant and machinery. The technology that qualifies for this 100% tax break
includes energy-efficient boilers and energy-saving lighting systems. This is set out in the Government's energy-saving technology list, which is updated each year. It was announced in the Autumn Budget 2017 that new technologies were being added, but also certain items such as Biomass-fired warm air heaters would no longer qualify from 1 April 2018. Note also that where the expenditure has the effect of
creating or increasing a loss for corporation tax purposes, the company can obtain a repayable first year tax credit. This credit, based on the amount of the loss attributable to the energy-saving technology spend, reduces to two-thirds of the corporation tax rate from 1 April 2018. Thus the relief reduces from 19% to just 12.67% from 1 April 2018.
NO INDEXATION OF COMPANY GAINS AFTER DECEMBER 2017 Indexation allowance was introduced in the 1970s to provide relief from paying tax on inflationary gains based on increases in RPI. The relief was abolished in 1998 for individuals and trusts, and replaced with taper relief. However, it was retained for companies. The Autumn Budget announced that indexation for corporation tax would cease for disposals from January 2018 onwards, although indexation up to December 2017 would be retained.
Although the change will apply to all chargeable assets
owned by companies, it will have a significant impact on property investment companies where indexation allowance acted as a shelter from inflationary gains.
At MSC, we help companies claim back tax relief for the time and money spent creating innovations. Since starting in 2012, we’ve helped many eligible companies understand the complex R&D Tax Relief system and claim back thousands of pounds.
Do you make advancements in your field of work?
Are you creating new or improved products/processes?
Are you duplicating existing products or processes in an improved way? e.g. faster, cheaper, less waste etc.
Does the company employ technical staff, engineers, software developers, testers, scientists etc?
MSC Associates E:
carla@mscassociates.co.uk
T: 01432 381054 M: 07738 698037 Skylon Court • Coldnose Road • Rotherwas • Hereford • HR2 6JL
W:
www.mscassociates.co.uk business network February 2018 51
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