DISCLAIMER:
This article is not financial advice. Before making any decisions relating to your finances, you should consult with a tax specialist who is familiar with the UK’s super deduction tax breaks.
If you have been looking to upgrade your business telecoms, there has never been a better time to get started. Until 2023, most UK businesses can claim back 130% of capital allowances on new technology purchases.
Businesses can deduct some of the expenditure on 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.
Is It Worth Upgrading Your Business Telecoms?
If you are already planning to upgrade your phone system, the government’s incentive could be a welcome addition to your current tech strategy. And if you have been putting off upgrading your telephony, the additional tax benefit may provide the push to finally commit.
These deductions are expected to last until the 31st of March 2023. This will mostly be offset by an increase in corporate tax rates for businesses with profits over £50,000. This increased tax rate will come into effect from April 2023.
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?
Why Is The Government Offering This Tax Break?
The goal of these tax savings is to encourage businesses to invest in assets that will increase their productivity. The hope is that this will enable business growth and improve the UK economy’s overall health.
Because modern telecoms technology can increase productivity, it’s no surprise that telephone systems are included in the tax break.
This special tax break will encourage organisations to invest in productivity-boosting gear and machinery that will help them scale their business.
To be eligible for this tax credit, the equipment must be brand new and purchased, not leased.
What Equipment Is Eligible For A Super Deduction?
Most hardware and machinery which would qualify for the standard 18% main pool for allowance write-downs will instead be eligible for the Super Deduction. This includes….
- New computers
- New servers
- New office chairs and desks
Under this scheme, new desk phones, routers, and other business communications hardware should be eligible for the super deduction.
How Carden Telecoms Can Help Upgrade Your Telecoms
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.
Carden Telecoms can help you make the right choices about your telecoms. Our team have helped improve and modernise telecoms systems at a variety of different businesses, improving their efficiency and helping them reduce their operating costs. Speak to our telecoms team today to learn more.
