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The super-deduction and special rate first year allowance (SR allowance) temporarily increase reliefs for companies on qualifying expenditure on plant or machinery from 1 April 2021 to 31 March 2023. They were introduced at Budget 2021 and are included in the Finance Act 2021 changes. HMRC guidance can be found at CA23162 onwards and HMRC has launched an interactive tool to help companies check if they can claim the super-deduction or the special rate first-year allowances. These are valuable reliefs where the date of expenditure is important for the asset to qualify so businesses will need to maintain records of dates of acquisition especially for larger projects that span 1 April 2021 and 1 April 2023.

The super-deduction and SR allowance were replaced by a 100% first year allowance (which is described by HMRC as ‘full expensing’) for main rate expenditure plant and machinery and a 50% first year allowance for special rate assets from 1 April 2023. These first year allowances only apply