The Institute of Directors (IoD) has called on the government to extend the capital allowances super-deduction.

Data published by the IoD found that the super-deduction has had ‘a positive and measurable impact’ since it was introduced in Budget 2021. The data showed that 13% of firms reported that the super-deduction had had a direct impact on their level of investment undertaken between 2021and 2023. For half of these businesses, it was an entirely new investment due to the super-deduction.

Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from new first-year capital allowances.

Under this measure, a company will be allowed to claim:

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

The relief is not available for unincorporated businesses.

The business group is urging the government to make the super-deduction permanent.

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