A transformational tax

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Chancellor Rishi Sunak’s recent Budget unveiled a host of measures designed to help stimulate business growth and recovery following the disruption of the global pandemic. One of these measures was the introduction of a ‘super deduction’, whereby UK businesses are able to use this super deduction to reduce their tax bill. In essence, from April 2021 until March 2023, companies can claim 130% capital allowances on qualifying plant and machinery investments. This in indeed great news for many businesses, particularly those looking to invest in their IT infrastructure, with their sights firmly set on enabling digital transformation. 

While there are obviously certain exceptions, the vast majority of IT spend will qualify. Physical IT hardware, such as computers and servers, are recognised as plant and machinery by HMRC, and certain software also qualifies, alongside some costs associated with bringing IT software investments into operation. With this in mind, how can businesses make best use of this super deduction to re-energise their business as we slowly emerge from the global pandemic?

Uniting the business

A key foundation of any digital transformation is an investment in a single, centralised solution, one which unites multiple business functions to provide in-depth visibility across the entire organisation. By bringing together seemingly disparate business functions, it eliminates the often manual, time-consuming processes that are involved in amalgamating crucial information from different departments. This provides instant access to the information needed to quickly and efficiently steer the business, reducing time spent searching for information and increasing the time spent acting on it.

This unfettered access to information and actionable insight greatly enhances decision-making too. Sound decisions can be made quickly and confidently, safe in the knowledge that the underlying business data is both accurate and up-to-date. As businesses attempt to respond effectively to ever-shifting market demands, continuing to adapt to unforeseen challenges, particularly in a post-COVID economy, this ability to react quickly, achieving real business agility, cannot be underestimated.

Future plans

Forward planning is also greatly enhanced. Such are the fluctuations in demand that the majority of businesses are facing these days, it’s vital that forward plans reflect this
as much as possible. The right systems are both accurate and flexible when it comes to robust forward planning capabilities, preparing for what lies ahead without putting in place an inflexible long-term plan, plans which are proving increasingly unfit-for-purpose in our fast-paced digital economy.

A flexible, scalable solution is a must too. Businesses need to keep an eye firmly on the future. What’s a good fit now, might not be right in twelve months’ time, so a solution that can adapt in-line with changing business needs is vital. The best integrated, centralised systems can manage multiple companies and multiple currencies, taking into account local and international regulatory requirements where necessary too. This capability is crucial for growing companies who are investing in their infrastructure today, choosing the right systems to support and even nurture future business growth.

Cloud support

For those businesses who are hoping to further embrace cloud IT, the super deduction paves the way for increased investment in the right equipment and mobile devices needed to support a virtual workforce. With the right tools in the field, businesses can optimise their existing cloud deployments, boosting productivity and increasing the digitisation of the business beyond what has already been achieved. Regardless if a business opts for an on-premise or cloud deployment, or even a combination of both, the chance to take advantage of the super-deduction provision over the next 24 months is simply too good to miss.

The budget’s super-deduction measure represents an ideal opportunity for businesses to reassess the suitability of their IT infrastructure. Through the right investment in the right infrastructure, businesses can be well-prepared for whatever lies ahead, putting the solid foundations in place today to tackle head-on the challenges of tomorrow, all while growing an increasingly successful, agile and responsive business.


Posted On: March 31, 2021