Incentive for manufacturers in UK

UK government does not support its manufacturing and farming industries like other countries.

Current incentives are listed below:

  1. Super deduction

Companies that incur qualifying expenditures between 1 April 2021 to 31 March 2023, can claim:

  • a super-deduction allowance of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
  • a first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances

Thus, super-deduction of 130% will provide a deduction exceeding the cost of the asset and first year deduction of 50% will accelerate allowances.

Exclusions

  1. Used and second hand will not qualify.
  2. Expenditures on contracts entered into prior to 3 March 2021 even if expenditures are incurred after 1 April 2021. 
  3. Plant and machinery expenditure which is incurred under a Hire Purchase or similar contract must meet additional conditions to qualify

Source:

ACCA guidance

2. Research & Development

This is more difficult to qualify but has higher rewards. If a company incurs expenditure to make an advance in science or technology, it can claim R&D relief:

  • deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
  • claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss

Source

Gov.uk

3. Government support directory

UK Government has made a helpful directory where businesses can find funding in shape of grants, equity and debt. Access it via link

4. Local chamber of commerce

One can join local chamber of commerce to meet similar businesses and share ideas and contacts.

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