Super-deductions – HMRC One to Many Letters

7 Mar 2023

HMRC have recently launched a One to Many letter campaign relating to super-deductions. Super-deductions are enhanced capital allowances available to companies which invest in qualifying new plant and machinery assets between 1 April 2021 and 31 March 2023. They can claim:

  • a 130% super-deduction capital allowance on qualifying plant and machinery investments
  • a 50% first-year allowance for qualifying special rate assets

HMRC will be sending two different letters, one for lease restrictions and one to companies whose accounting period straddles 1 April 2021. 

For leasing restrictions, HMRC are writing to companies who may have claimed super-deductions on assets that they lease out. The letter highlights and provides links to the rules and guidance for super-deductions and leased assets. Spending on plant or machinery does not qualify for the super-deduction if it is bought to lease or to hire to someone else. If the company has claimed super-deductions incorrectly, HMRC are asking them to amend their company tax return. 

For companies whose accounting period straddles 1 April 2021, HMRC are asking them to check the date when the company entered into the contract to buy the plant or machinery. The letter highlights and provides links to the rules and guidance for super-deductions. The super-deduction is not available if the company entered into a contract to buy the plant and machinery before 3 March 2021.  If the company has claimed super-deductions incorrectly, HMRC are asking them to amend their tax return. 

The letters have been copied to the taxpayer’s authorised agent if they have one. 

HMRC have provided us with the following additional information about the campaign: 

  • A small number of companies have been sent the letters
  • HMRC issued the letters on 1 March 2023. 
  • HMRC regularly sends letters to taxpayers to educate, remind or prompt them to review their tax affairs, particularly where they have information that suggests there are specific risks to the payment of tax owed.  

Super-deductions – lease restriction letter

Super-deductions – companies whose accounting period straddles 1 April 2021 letter