Struggling businesses ― how to ease cash flow

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

If OMBs are struggling to maintain their cash flow and are maybe looking to obtaining debt from outside sources, this guidance note provides a summary of tax areas that can be reviewed with your OMB corporate clients that can help with cash flow and accessing funds.

Maximising capital allowance claims

Capital allowances are a valuable tax relief for OMBs, and maximising any claims can help improve cash flow. Specific areas to review are as follows:

Super-deduction and special rate first year allowance

The super-deduction and special rate first year allowance (SR allowance) are temporary reliefs available to companies which incur qualifying expenditure on plant or machinery between 1 April 2021 to 31 March 2023. There is no upper limit to the level of expenditure that attracts these allowances.

The reliefs operate as follows:

•
a super-deduction of 130% allowances is available on new plant or machinery that is not special rate expenditure, ie it would ordinarily qualify for the 18% main rate writing down allowance, and
•
a first year allowance of 50% on new plant

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