How Manufacturers Are Approaching the ‘Super-deduction’

Manufacturing worker in a warehouse covered by Manufacturing insurance

With a new super-deduction now available, manufacturing firms willing to invest in plant and machinery assets have entered a three-year window during which such investments may be particularly lucrative. From 1st April 2021 through 31st March 2023, the incentive will allow firms to claim a 130 per cent capital allowance on qualifying plant and machinery investments. This means that an employer that purchases equipment for $10,000 can deduct $13,000 from its 2021 revenue. According to government officials, the super-deduction will allow firms to trim their tax bills by up to 25 pence for every pound that they invest.

In April, Make UK released the results of a survey of 149 organisations that was conducted between 17th and 24th March, 2021. These figures can provide an indication of how various firms may be approaching the opportunity that the super-deduction offers. Consider the following findings:

  • Approximately 23 per cent of organisations said that the super-deduction tax incentive would directly result in increased investment.
  • Approximately 28 per cent of those surveyed responded that they would consider investment plans in response to the super-deduction.
  • Approximately 49 per cent said that the super-deduction would not impact future investment plans.
  • Approximately 32 per cent of respondents said that the super-deduction was the most impactful component of the 2021 budget.


In addition to these findings related directly to the super-deduction, nearly 20 per cent of manufacturers viewed the 2021 budget positively, while only 3.4 per cent had negative reactions. This was especially true among mid-sized and large companies.


Manufacturing firms should familiarise themselves with how the super-deduction may be able to benefit them and any planned or proposed investments. For more information, contact us today.