a winning combination
CBILS and the tax "super-deduction"
With careful timing you can have a payment holiday and extra tax relief
do you you have capital expenditure planned in the coming months?
The deadline for CBILS is 31 March 2021 so the countdown has started. Whether you need equipment for expansion, diversification or replacement it could be worth considering an asset finance facility utilising this scheme.
Whilst the Budget on 3 March announced a Recovery Loan Scheme would be available from 6 April 2021 this simply provides the lender with a guarantee of 80%, and does not offer financial incentives.
We do not believe in taking on debt that you do not require, however with all interest and fees paid for the first year with a CBILS facility, it could be very cost effective. With a 12 month capital repayment holiday also available it could be a great way for you to invest in equipment to give you an immediate return on investment.
cbils application countdown
what is the tax super deduction?
The super-deduction measure was announced in the Budget, and starts on 1 April 2021. For expenditure incurred from then until 31 March 2023, companies can claim 130% capital allowances on most new plant and machinery that usually qualifies for 18% main rate writing down allowance.
This is only available to limited companies for new equipment. However the Annual Investment Allowance is still available until 31 December 2021 for other types of business and used equipment. You can find more information and examples on the Government Super Deduction Factsheet.
Although CBILS applications close on 31 March, any approval issued will be valid for up to 6 months. Therefore, if you are a limited company, you would also be able to take advantage of the tax super deduction.
Asset finance is suitable for a wide range of businesses and organisations, including sole traders and small to medium-sized enterprises, as well as larger companies and corporations. We can arrange asset finance on almost anything you need for business use.
is my business eligible for CBILS?
You can apply for a CBILS facility if your business:
- is based in the UK
- has an annual turnover of up to £45 million
- your business would be viable were it not for the pandemic
- it has been adversely impacted by the coronavirus
If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on 31 December 2019.
Businesses from any sector can apply, except banks, insurers, public-sector bodies and state-funded primary and secondary schools
can I have more than one CBILS facility?
Yes, you can have more than one CBILS arrangement. The total amount permitted is:
- A maximum of 25% of 2019 turnover or
- Twice the annual wage bill – whichever is greater.
However please note that you cannot take out a CBILS agreement if you have an active Bounce Back Loan.
To have a chat about your individual requirements with no obligation just call, email or request a call back.