Tax experts are tripping over each other to advise dealer principals to get their cheque books out and start spending on showroom developments and image overhauls, to take advantage of the so-called ‘super-deduction’ tax relief that Rishi Sunak dropped into the recent Budget.
We know the Budget was a week or so ago, but experts are still putting flesh on the bones of the issues that most benefit our sector.
Writing in the Tax Journal (what do you mean, you don’t subscribe?!) Steven Bone, director at tax incentives specialist, Gateley Capitus, said that small independents will benefit from the extension of the Retail Business Rate Relief Scheme into the 2021/22 tax year.
Over at the Independent Garage Association, chief exec Stuart James took credit for asking the Chancellor to continue the scheme, adding: “Extending the furlough and business rate relief schemes will provide the financial assistance needed to help independent garages through this upcoming difficult period, so they can continue their essential work keeping vehicles in their local communities safe and roadworthy.”
So how come some dealers are expected to splurge on developments? Quoted in AM, Peter Graham, RSM’s head of capital allowances, said the Budget has handed dealers “a real opportunity to make long-term strategic investment” enabling dealers to claim relief of up to 130% on new main pool plant and machinery up to the end of March 2023. So showroom upgrades qualify for the incentive.
Sue Robinson at the NFDA is ever astute in these matters. She said: “Due to the significant challenges facing our economy, the announcement about the rise in corporation tax was not unexpected. However, the fact that the increase will not come into effect until 2023 will give businesses some time to start to recover from the current disruption. The ‘super deduction’ tax relief will partly offset this increase especially as retailers need to make further investments into their sites to meet changing demand.”
We’re very keen to see dealerships bring their development plans forward.