The Super-Deduction was one of the UK government’s most generous capital allowance schemes, introduced in 2021 to boost business investment. It allowed companies to deduct 130% of qualifying capital expenditure from their profits, significantly reducing their corporation tax bill.
But with the original scheme ending in March 2023, many business owners are wondering: Can you still benefit from the super-deduction in 2025? If you have specific questions about tax and deductions get in touch with Clayton Stirling today.
Who are Clayton Stirling? Clayton Stirling & Co is a small independent firm of accountants and tax advisers, founded in 1989. For over 25 years the firm has operated from premises on Echo Square in Gravesend, Kent.
In this post, we explain what the super-deduction was, who could use it, what’s replaced it, and what capital allowance options you still have today.
1. What was the Super-Deduction?
The Super-Deduction was a temporary measure introduced in the Spring Budget 2021, running from 1 April 2021 to 31 March 2023.
- It allowed limited companies to claim 130% first-year capital allowance on qualifying plant and machinery investments.
- That means for every £1,000 spent, companies could deduct £1,300 from their taxable profits.
- It was designed to encourage post-COVID business investment in equipment, vehicles, and assets.
Example: If you bought £50,000 worth of eligible equipment, you could deduct £65,000 from your profits—resulting in a potential tax saving of £12,350 (based on 19% tax rate).
2. What kind of purchases qualified?
Only new and unused assets qualified under the scheme. Examples of eligible expenditure included:
- Office furniture and IT equipment
- Tools and machinery
- Vans and commercial vehicles (not cars)
- Manufacturing and construction equipment
- Warehouse shelving and storage systems
Excluded items:
- Second-hand equipment
- Buildings or land
- Leased or hired items
- Cars (even for business use)
3. Can you still claim the Super-Deduction in 2025?
No — the Super-Deduction officially ended on 31 March 2023.
However, if:
- Your company entered into a contract before 3 March 2021 for delivery after 1 April 2021
- Or if the asset was delivered before 1 April 2023 but not yet included in your return
…you may still be able to claim it on prior year returns (e.g. 2022/23 tax year), depending on your accounting period and when the expenditure was incurred.
If you’re unsure whether your past purchases qualify, Clayton Stirling can help review your accounts and file amended returns where appropriate. If you are unsure on if you are eligible, get in touch with us today.
4. What has replaced the Super-Deduction?
The government introduced Full Expensing in the Spring Budget 2023 to replace the Super-Deduction for companies investing in qualifying assets.
Here’s how it compares:
Full Expensing (from April 2023):
- 100% deduction on new plant and machinery purchases
- Applies only to companies (not sole traders or partnerships)
- No uplift like the 130% super-deduction
- No upper spending limit (unlike Annual Investment Allowance)
You can also still use the Annual Investment Allowance (AIA), which allows 100% deduction on qualifying capital up to £1 million—and it applies to all businesses, not just companies.
5. What should UK businesses do in 2025?
Even though the Super-Deduction is no longer available, there are still significant tax-saving opportunities when investing in your business. Here’s what you should do:
Review your past capital purchases (2021–2023) – You might still be able to amend prior year claims.
- Use Full Expensing if you’re a limited company investing in new assets.
- Claim AIA if you’re a sole trader or spending less than £1 million annually.
- Speak to an accountant before major investments – we’ll help you time purchases, structure claims, and reduce your tax bill.
At Clayton Stirling, we help businesses across Sittingbourne and the UK make smart, tax-efficient investments in equipment and growth. Whether you’re planning new purchases or reviewing past claims, we’re here to help.
Conclusion: Are Super-Deductions still valid?
While the Super-Deduction has officially ended, the opportunity to save on tax through capital allowances hasn’t. With schemes like Full Expensing and the Annual Investment Allowance still available in 2025, it’s essential to understand what your business can claim—and when.
If you’re unsure whether past purchases qualify, or you’re planning to invest in new equipment, it’s worth getting expert advice. At Clayton Stirling, we’ll help you navigate the rules, maximise your reliefs, and make confident, tax-efficient business decisions.
Contact us today to review your options and make sure your business isn’t leaving money on the table.
