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Use the Super-deduction template for the 130% first-year allowance that was available on qualifying new main-pool plant and machinery. The super-deduction applied to expenditure incurred between 1 April 2021 and 31 March 2023 and has since been replaced by full expensing. The template calculates the allowance for any remaining in-scope expenditure and, importantly, the balancing charge that arises when a super-deduction asset is later disposed of.

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When should I use this template?

Use it where the company incurred qualifying super-deduction expenditure in the 1 April 2021 to 31 March 2023 window, or where it is now disposing of an asset on which the super-deduction was claimed, so that the balancing charge is brought into account.

Because the super-deduction has been withdrawn for new expenditure, for most current periods this template is used to deal with disposals of assets on which the super-deduction was previously claimed.

Before you start

  • A business type must be selected in the Business type section of the Return information template. If none is selected, the template shows a warning and cannot calculate.
  • Qualifying additions are pulled in from the Total fixed asset additions template, so mark the relevant additions with the super-deduction tax treatment there first.

Background: how the super-deduction works

The super-deduction gave a 130% first-year allowance on qualifying new main-pool (general rate) plant and machinery. Because relief was given at 130% of cost, disposing of a super-deduction asset triggers a balancing charge that can be uplifted to reflect the enhanced allowance originally given. The template calculates this balancing charge on disposal.

Step 1: Confirm qualifying additions

Additions marked with the super-deduction tax treatment in Total fixed asset additions appear here. Review the qualifying expenditure and the 130% allowance calculated on it.

Step 2: Deal with disposals

Where a super-deduction asset is disposed of, the template calculates the balancing charge, which is added back in the computation. The disposal proceeds are taken from the disposals analysis.

What flows through to the rest of Corporation Tax?

The super-deduction allowance reduces taxable profit in the period it is claimed, and any balancing charge on disposal increases taxable profit. Both are reflected in the capital allowances feeding the tax computation, with the appropriate iXBRL tags.

Frequently asked questions

Can I still claim the super-deduction on new expenditure?

No. The super-deduction applied only to expenditure incurred between 1 April 2021 and 31 March 2023. New qualifying main-pool expenditure from 1 April 2023 is dealt with under full expensing (the 100% FYA template).

Why is there a balancing charge on disposal?

Because the super-deduction gave relief at 130% of cost, a disposal triggers a balancing charge, which may be uplifted to reflect the enhanced allowance originally given.

Where do the figures come from?

Qualifying additions come from Total fixed asset additions (super-deduction treatment); disposal proceeds come from the disposals analysis.