GREEN MEANS GO
BUDGET 2021: THE SUPER-DEDUCTION FOR BUSINESSES IN THE UK
What is the UK Super-Deduction?
The super deduction is a new 130 per cent first-year capital allowance for businesses who are investing in newly- purchased EV charging equipment, which would normally qualify for just 18 per cent writing down allowances. ChargePoint reports that if your company is eligible, you may be able to lower your Corporation Tax bill by up to 25p for every £1 you invest in newly- purchased EV charging equipment. See the official super deduction fact sheet here:
https://bit.ly/33WG6xf and the UK government’s official page for more information:
https://bit.ly/2S9BEbH
The Super Deduction lasts until 31 March 2023, so check now if you are eligible.
‘NO NOTICE’ TO BE GIVEN ON FUTURE PLUG-IN GRANT CUTS
The Government is warning that it is “unlikely” it will be able to give advance notice of any future cuts to the plug-in car and van grant. A reduction in the grant for the pur- chase of EVs was announced without any notice in March. The electric car grant was reduced from £3,000 to £2,500 and excluded models that cost more than £35,000 with immediate effect. The fleet and leasing industry was crit- ical of not having been given prior notice of the reduction, with some cus- tomers missing out because they were part way through the order process. However, representatives from the Office for Zero Emission Vehicles (OZEV), part of the DfT which adminis- ters the grant, confirmed they are “unlikely to be able to provide addition- al notice” given the need to manage the grant budget “on behalf of taxpay- ers and future grant applicants”. At a meeting organised by the National
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Franchised Dealers Association (NFDA) to provide retailers with clarity around the grant following recent cuts, OZEV said that going forward, the Gov- ernment intends to “gradually deliver a managed exit” from the grants (which have been extended until 2022/23) although uptake will continue to be supported through other measures. OZEV added that the relatively low lev- els of demand when the grant was first introduced meant they were able to give advance notice of rate changes. However, when the market was given advance notice of a reduction in the grant in 2018, the news sparked a rush from buyers eager to qualify for the grant at the higher level. It reported that grant-eligible vehicles were sold at a rate that was more than six times higher than normal, causing officials to bring the original date for- ward. When a further cut was announced in the plug-in car grant last year, the
industry was just given a few hours’ notice. OZEV also highlighted they are “unlike- ly” to offer leeway for grant changes similar to the 28-day, which was offered following the most recent changes. This allowed dealers and manufactur- ers to claim at previous rates and eligibility criteria for any orders that were placed by customers in the 28 days before the grant rate change which were not logged on the portal. Sue Robinson, NFDA chief executive, says that the meeting with OZEV offi- cials was “extremely useful” in providing retailers with further clarity around the plug-in grant, including details on the definition of price cap which not all dealers are aware of. “Going forward, we will continue to work closely with OZEV to best repre- sent our members’ interests and, in turn, provide franchised dealers with clear and timely guidance,” she said.
JUNE 2021
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