New Tax Savings for Corporate Partnerships

28 Feb 2024

HM Revenue and Customs (HMRC) have updated their Capital Allowances manuals to confirm that partnerships with corporate partners are entitled to claim first year capital allowances.

Freya Webb, Tax Associate, explains more in our latest article.

This means corporate partners can tap into incentives like full expensing and the super deduction, offering significant opportunities for tax savings on their annual returns.

What Does This Mean for Your Business?

Super-deduction and Full expensing

These first-year allowances offer substantial tax benefits, allowing you to deduct a significant portion of qualifying capital expenditures from your taxable income.

Specifically, the super-deduction provides a first-year relief of 130%, while full expensing offers a 100% first-year relief on qualifying expenditures.

For expenditure to qualify for the super deduction, the following criteria should be satisfied:

• An incorporated company or corporate partnership must incur the expenditure;

• The expenditure is capital in nature and incurred on plant and machinery that are main rate assets;

• The assets must be new and unused;

• Expenditure must be incurred on or after 1 April 2021 but before 31 March 2023 ;

• The assets should not be acquired from connected parties or intended for leasing and

• Notably, the assets must not be cars.

The conditions for expenditure to qualify for full expensing are the same as the above, except the expenditure must be incurred on or after 1 April 2023 but before 1 April 2026.

Navigating Partnership Dynamics

For partnerships with mixed tax obligations among their members, such as those subject to income tax and corporation tax, there are complexities to consider. However, with expert guidance, you can still optimise your tax strategy to maximise savings within the parameters of your partnership structure.

How We Can Help:

Specialised Expertise

Freya is a member of our specialist Tax Consultancy Team. Freya’s addition to the team reflects WR Partners’ commitment to training and nurturing fresh talent. Freya is an Oxford law graduate who will support the team with projects whilst continuing to study for further qualifications in the field.  

Our accounting team navigates complex tax regulations and can provide tailored guidance to ensure you maximise available allowances. We’ll work closely with you to understand your partnership’s unique circumstances and identify opportunities for optimisation.

Request a callback from our team:

Team members related to this article...

Fran Johnson

Audit & Commercial Partner

Fran specialises in providing high-quality audits to a wide variety of clients including owner-managed businesses, large corporate clients and academy trusts.

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Simon Baker

Commercial Partner

Simon is passionate about developing businesses and supporting them through change and growth, from practice management issues to succession planning.

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