Invest in a new phone system and get a super deduction tax break

The shape of tax incentives from the government is always a clue about how they hope to motivate businesses.

So it’s no surprise that the government’s temporary tax deductions for qualifying plant and machinery are designed to encourage companies to make investments in their business, to stimulate economic growth.

And whilst this blog is not intended to represent tax advice (we’re telecoms experts, not accountants), we thought it worth mentioning some business tax allowances recently implemented by the UK Government.

Super deduction

In the Spring 2021 Budget, the Chancellor confirmed the introduction of a ‘super deduction’, through which firms can claim 130% capital allowances.

This means that companies can write off some of the costs of investment in machinery and hardware, including phone equipment and phone systems.

The net effect of this will be to cut corporation tax by 25p for every pound invested in new qualifying equipment. The deductions are scheduled to remain in place until the end of March 2023.

Stimulate growth

The rationale behind the tax incentives is to encourage firms to invest in assets that will improve their productivity, enable growth and improve the overall shape of the economy.

So, it’s no surprise that telephone systems are included in the tax discount, as modern telecoms technology is designed to improve productivity and flexibility.

This super deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.

To qualify for the tax incentive, the equipment needs to be new and not used for leasing.

A welcome contribution

If you already have plans for an improved telephone system, then the government’s incentive could come as a welcome contribution to your existing technology strategy.

And, if you have been procrastinating about new telephony, the tax incentive could provide the impetus to bring forward your plan.

Planning is needed

Tax incentive or not, re-designing your telephony system requires a clear plan and it’s important to work closely with a trusted experienced provider who can understand your requirements and devise a system that will work for you now, and in the years ahead.

Future trends

The continuing demand for flexible working is driving businesses of all sizes to upgrade their telephony to cloud-based solutions, enabling flexibility and productivity benefits.

And the latest in telecoms technology provides the opportunity to integrate or unify the many communications platforms within your business.

So, in many ways, there has never been a better time to consider improving your telephony.

We recommend that you speak with your accountant about how the super deduction could support your business investment plans and help your business growth.


If you’d like to know more about upgrading your business’s phone system, Time Communications would be happy to talk you through the options available to you. Contact our expert team on 0113 2059640, you can request a callback on our home page, email at [email protected] or message us here.

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