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  • Writer's pictureAngela Sanna

Upgrade your Telecoms and take advantage of the UK’s Super Deduction Tax Break

If you have been looking to upgrade your business telecoms, there has never been a better time to get started. Until 31st March 2023, most UK businesses can claim back 130% of capital allowances on new technology purchases.


Businesses can deduct some of the expenditure of new hardware, plant, and machinery investments. This includes phone systems and other telecoms equipment. The result is functionally a 25p reduction in corporation tax for every pound spent on new eligible equipment.


What is the super-deduction?

Announced in 2021, the super-deduction tax relief applies to “expenditure incurred from 1 April 2021 until the end of March 2023” and means “companies can claim 130% capital allowances on qualifying plant and machinery investments”.


This and the 50% first year allowance (see here for more detail), could enable investing companies to significantly lower their corporation tax bills. These benefits have been put in place to promote economic growth and incentivise additional business investments or bring forward planned expenditure.


Who can benefit?

This is open to businesses of all sizes, including SMEs, however, it does exclude partnerships, sole traders and other organisations not paying corporation tax.

When can I take advantage of this?


The four new capital allowance measures are already in place and will remain so for qualifying expenditure on plant and machinery up to and including 31st March 2023.


With all businesses required to upgrade to an all-IP solution ahead of the 2025 PSTN Switch Off, this could be the perfect time to make the change; avoid the anticipated rush ahead of the deadline whilst taking advantage of the tax relief and lowering your operating expenses moving forward.


A welcome contribution

If you already have plans for an improved telephone system, then the governments incentive could come as a welcome contribution to your existing technology strategy. And, if you’ve been on the fence about a new telephone set up, the tax incentive could be just the impetus to bring forward your plans.


It is also worth noting that BT will stop supplying wholesale ISDN circuits from 2025 onward. This means that all businesses with legacy phone systems will need to upgrade them at some point over the next few years. Why not do it now when you can still benefit from the available super deduction?


Make the move with Delta

Whether you take advantage of the tax incentive or not, overhauling your telephony system necessitates a carefully planned strategy. It is critical to collaborate closely with a reputable, experienced, managed telecoms provider. One who can understand your needs and design a system that will serve you well now and in the future.

Delta 365 can help you make the right choices about your telecoms. Our team have helped improve and modernise telecoms systems across many business sectors, improving their efficiency and helping them reduce their operating costs.


This article is not financial advice. Before making any decisions relating to your finances, you should consult with tax specialist who is familiar with the UK’s super deduction tax breaks.



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