Capital Tax Allowances and EPOS Systems – Why there has never been a better time to invest in a new solution!

epos capital tax allowance

We understand that purchasing EPOS systems is a big expense and can sometimes feel like a big leap of faith for any business, but with the recent announcement from the UK Government regarding Capital Allowances and the new incentives, there is no better time to take the leap for your business than now.   Thanks to the government’s announcement of a ‘super deduction’, many businesses will be eligible to reduce their tax bill. This means that in a majority of cases any spend on hardware and software will be eligible, including most EPOS hardware, software and systems. This is due to physical IT equipment and software being recognised as plant and machinery by the HMRC. This creates an ideal environment and a great opportunity to maximise return on investment (ROI).

What are Capital Allowances?

Capital Allowances are tax relief on purchases that are essential to the running of your business, for example, a new EPOS machine for your restaurant. These items stay within your business assets, which is essentially the opposite of the business’ day to day running costs.  The UK government are encouraging businesses to invest now to help stimulate growth and recovery following the pandemic’s economic disruption. This will allow businesses to be rewarded for investing in new assets through a ‘super deduction’ of their tax bill. This tax break came into place on April 1st 2021 and will continue through to March 31st 2023.  The deduction is only available to companies that are required to pay corporation tax.   Unincorporated companies can instead claim capital allowances of 100 per cent up to the value of £1 million as an annual investment allowance (which has been extended to December 31st 2021, when it will revert to £200,000). 

What is considered Plant and Machinery? 

Most assets used in the course of a business can be considered under ‘plant and machinery’ for the purposes of claiming tax allowance.  What will typically qualify for the super-deduction include: 

  • Computer equipment and servers 
  • Office chairs and desks 
  • Refrigeration units 
  • Electric vehicle charge points 
  • Lorries, Vans and Tractors 
  • Solar panels 
  • Foundry equipment  
  • Ladders, drills and cranes  

Although it is important to note that this relief is only available for new equipment, and not any second-hand equipment or existing equipment repairs. 

What does that mean for your business? 

The policy’s aim is to stimulate business investment and does so by increasing the incentive for purchasing brand new plants and machinery. The incentive offers higher rates of tax relief than were previously available.  In effect, the deduction means that you can claim tax relief based on 130 per cent of the actual investment, which would allow you to invest in new equipment that you may not have planned to.   For example: If your company were to make £1200 profit and spend £200 on a qualifying investment, in previous years you’d have had £1000 taxable profit, and per the 19 per cent tax rate have paid £190. With the super deduction, an investment of the same amount would give £940 taxable profit meaning you’d pay only £178.60 in tax, saving you £11.40, which may not seem like a lot, but, every penny counts, more so than ever, following the past 18 months and the turmoil created during the pandemic. Plus, the larger the investment the bigger the saving and so any big capital purchases you’ve been putting off, are the best being made sooner rather than later.  In addition to this, you may be able to take advantage of a 50 per cent first-year allowance (FYA) for qualifying special-rate assets.

So how can we help? 

Haven Systems ltd is an EPOS provider and payment specialist with more than 30 years of experience – make tax savings by investing in a brand-new modular or hybrid EPOS System today. Many of our products are eligible for the super deduction meaning you could save money and take your business to the next level.  Investing in a new EPOS System prior to the ‘super deduction’ cut-off date makes perfect sense for your business, not just in terms of taking advantage of the Chancellor of the Exchequer’s highly popular ‘super deduction,’ but also to take advantage of the improved speed of service, stock control and more efficient resource management. Combine this with the growing trend for order and pay at the table, click & collect and delivery schedule, then we have a great opportunity to improve profitability. Increased profit and an unprecedented tax policy!  Get in touch with our highly experienced and friendly team to see how we can help and talk to us about implementing a completely new solution or upgrading your existing EPOS system.   Or email sales@haven-systems.co.uk and request your copy of the HM Treasury Budget 2021 – Super –Deduction fact sheet. You might be interested to read this: Is annual or monthly billing better for subscription-based memberships?