A super-deduction Annual Investment Allowance (AIA) on new asset purchases was announced in the UK government’s March 2021 Spring Budget. Running from Thursday 1st April 2021 for two years, this is a true incentive for businesses to commit to new investment.
All new plant and machinery purchases (including commercial vehicles) will qualify, allowing a business to offset 130% of the asset value against their taxable profits in that first year. For example, if an asset costs £100,000, this equates to a tax saving of £24,700 at the current Corporation Tax rate (19%). There is no limit on purchases, and the scheme applies to Hire Purchase, loans and cash transactions until 31st March 2023.
Also included in the Budget was a £1 million AIA limit that businesses can utilise for used assets. The same principle applies from the earlier example, but 100% can be offset against taxable profit with used asset purchases. The good news is that this equates to a tax saving of £19,000 on a £100,000 investment. The bad news is that it’s set to expire on 31st December 2021.
The Road Haulage Association (RHA) has partnered with PMD Business Finance, one of the UK’s largest independent business finance providers, underpinning their reputation in the sector. As part of the RHA’s Business Bureau, PMD is entrusted to offer unbiased support and funding solutions to all members, prioritising the growing success of their businesses.
Established in 2010 by Peter Dobson, PMD has grown significantly and is now lending over £150 million each year to UK businesses. The company provides a diverse and flexible range of business finance solutions, including Asset Finance, Asset Refinance, Business Loans, Invoice Finance, Business Loans, Acquisition Finance, Property Finance and Supplier Finance.
You can finance more than just trucks and trailers
PMD can help businesses finance a range of hard and soft assets, including brake testing equipment, warehouse equipment, IT, racking and equipment for Direct Vision Standard.
Since the launch of RHA Business Finance driven by PMD in March 2020, the team has facilitated over 35 members, including Eliko Food Distributors Ltd.
Director Eli Kohn commented: “I am absolutely delighted with the service provided by Helen and the PMD team to help me secure the £250,000 loan we needed to aid our ambitious growth plans over the next few years. Helen went out of her way to find the solution that worked for our business and it’s been a refreshing change to work with a broker like PMD.”
Refinance your fleet to release much-needed cash
PMD looks after 3,000 operators within the haulage sector and is experienced in assisting business owners with their niche requirements, whether they are considering acquiring vehicles and trailers, workshop equipment or IT.
Many operators have taken on new debt because of the pandemic and these commitments need servicing, which may strain cash flow. PMD has helped numerous businesses to refinance their existing fleet of trucks and trailers quickly, which can lower monthly finance repayments and release much-needed funds.
PMD has also raised finance for several haulage company acquisitions and can support with government-backed loans. Launched on 6th April 2021, the Recovery Loan Scheme includes Asset Finance and Invoice Finance, which releases cash tied up in unpaid invoices and has many advantages over traditional bank overdrafts. Businesses can apply for facilities of up to £10 million (and a maximum of £30 million per Group) with no minimum trading history requirement. Those who have taken out a CBILS or bounce-back loan can still access this scheme.
With comprehensive access to the market, PMD Business Finance is on hand to talk through super-deduction AIA or any of the schemes mentioned and how they can help your imminent growth plans. Get in touch today on 0161 633 2548 or email email@example.com quoting “PMDCM”.