Clarity on super deduction for charge points due soon, says AFP
The Association of Fleet Professionals (AFP) is to continue lobbying the Government on clarification of whether electric vehicle charge points will qualify for the new super deduction tax relief.
Revealed in this year’s Budget, the temporary 130% upfront capital allowances super deduction applies to qualifying investment in plant and machinery made from 1 April 2021 to 31 March 2023.
It means companies will be able to claim a 130% super deduction capital allowance on qualifying plant and machinery investments that normally get the 18% main rate writing-down allowances. This means that for every £100 companies invest in expenditure, they will get a reduction of £24.70, according to the AFP webinar.
It also gives a first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing-down allowances.
Although it’s been confirmed to apply to new vans – but not cars – the application of super deduction for EV charge points and any ancillaries still remains unknown and while HMRC has said the super deduction provides a “strong incentive to make additional investments, and to bring planned investments forward”, it has still not confirmed whether it will apply to charge points.
According to this week’s AFP webinar on ‘Tax and the Company Car’, it will apply to charge points but it’s still not known how they will be classified, according to tax specialists David Chandler and Harvey Perkins from consultancy firm HRUX.
Speaking at the webinar – which also officially launched the AFP’s new 13-point Tax Manifesto – David Chandler said: “The problem we have is whether the charge points are classified as plant, or if they are classified as fixtures. If they’re classified as fixtures, they’re only allowable for the 50% first year allowance. But if they are classified as plant, they would be allowed the full 130%.”
He continued: “I can’t sit there and tell you whether it’s one or the other – because it’s not written down in black and white in the legislation.”
HRUX and the AFP added that they will continue to lobby the Government to find out what is included; the hope is that HMRC will issue guidance in the coming weeks and months.