HMRC Clarifies Partnership Eligibility for Capital Allowances

HM Revenue and Customs (HMRC) has revised guidelines to make it clear that partnerships with corporate partners are eligible for tax benefits that were previously limited to companies subject to corporation tax. This policy change allows partnerships to claim first-year allowances such as full expensing and the super-deduction. 

The extension of HMRC’s Capital Allowances policy primarily impacts two areas. 

1. Full expensing, which allows businesses to deduct the full cost of qualifying capital assets from their taxable profits. 
2. The super-deduction, which allows companies to claim 130% of the cost of qualifying new plant and machinery. 

Both of these allowances lead to substantial tax savings, encouraging capital investment and accelerating business growth and expansion.

HMRC's decision to extend capital allowances and the super-deduction to partnerships with corporate partners is a positive step towards equitable tax treatment for different business structures.

If you have any queries regarding how these changes impact your partnership or how to maximise the benefits of this policy update, our expert tax team is here to help.    Contact us at js.tax@jsllp.co.uk. 

With a deep understanding of capital allowances and their implications, we can guide you through strategic planning and investment decisions to optimise your tax position.