On 29th March 2023, the UK Chancellor of the Exchequer announced an update to the Spring Budget, which included the replacement of the Super Deduction tax break with a new “full expensing” tax break.
The new scheme will have a significant impact on businesses wanting to invest in new IT equipment and provisions.
Will the “Full Expensing” Scheme Benefit SMEs?
“Full expensing” will allow businesses across the UK, including SMEs, to write off the full cost of their IT equipment in the year they invest. The costs can be deducted “in full and immediately” from taxable profits, reducing a business’s tax liability and freeing up cash flow for reinvestment into their business.
The full expensing scheme is currently in effect and will run until 31 March 2026.
The full expensing tax break is designed to incentivise businesses to invest in capital assets, such as IT infrastructure equipment. The full cost of the asset will be fully deductible, rather than just a portion, which will provide a more significant tax benefit for businesses.
Why Invest in New IT Equipment?
The new tax scheme is expected to have a positive impact on businesses, particularly those in the technology sector, where investments in IT equipment are essential for growth and innovation.
It’s hoped it will encourage businesses to invest in new and innovative technologies, leading to increased productivity, competitiveness, and ultimately, economic growth.
Here are 5 reasons why your small-mid sized business should invest in new IT equipment:
1. Increased Productivity
Older IT equipment can slow down business processes and decrease productivity. Investing in new and faster equipment will help employees work more efficiently, reducing the time it takes to complete tasks and increasing overall productivity.
This can help SMEs to better compete with larger companies and increase profitability.
At DVAD we offer a wide range of IT infrastructure and hardware solutions, allowing businesses to implement a cost effective, reliable, and cutting edge technology infrastructure.
2. Improved Data Security
Cybersecurity threats are on the rise, and SMEs are increasingly becoming targets for cybercriminals. New IT equipment and hardware often comes with better security features that can help protect business data from unauthorised access or theft.
This will help to prevent costly data breaches and protect the reputation of a business.
Along with IT infrastructure services, we also offer comprehensive cyber security solutions that businesses can rely on to mitigate the risks of ransomware, malware, and viruses.
3. Greater Flexibility
New IT equipment will provide SMEs with greater flexibility in how they work. For example, cloud-based solutions allow employees to work remotely and access business data from anywhere in the world that has internet access.
This will help SMEs to adapt to changing work environments and stay competitive in the market.
4. Better Customer Experience
Investing in new IT equipment helps SMEs to provide a better customer experience. For example, implementing a new customer relationship management (CRM) system helps businesses manage customer interactions more efficiently and provide a more personalised experience.
This increases customer satisfaction and retention, which leads to increased profits in the long run.
5. Cost Savings
While investing in new IT equipment can be costly upfront, it can provide cost savings in the long run.
Newer equipment is often more energy-efficient, reducing energy costs and helping businesses to become more environmentally friendly. Additionally, new equipment is less likely to break down and require costly repairs, reducing maintenance costs.
As technology continues to evolve at an unprecedented pace, businesses of all sizes are looking for ways to stay ahead of the curve. For SMEs, investing in new IT equipment can provide a significant competitive advantage as detailed above.
SME owners should seriously consider investing in new IT equipment while the full expensing tax scheme is running and the cost of qualifying IT assets can be redeemed.
If you’d like more information on the “full expensing” tax break and what equipment qualifies under the new scheme, please call us on 0800 84 999 84, or email us at email@example.com. A member of our team will be happy to help!