Licensee receives 130% capital allowance by investing in new equipment

How-can-pubs-receive-a-super-deduction-in-tax.jpg
Super-deduction: Pubs can claim capital allowances for investing in air purifiers which claim to eliminate coronavirus droplets in the air (Credit: Getty/ Peter Muller)

A Lincolnshire-based licensee has received a 130% tax relief from the Government by simply investing in new equipment for the pub.

Paul Vidic, who operates the community-owned Thorold Arms in Harmston, Lincoln, recently invested £3,200 into an air purification system that claimed to filter out coronavirus and flu droplets from the air without the need for extra ventilation.

Vidic, who invested in two of the Swedish manufactured machines for his 65-seater pub, said: “It’s constantly working, you can hardly hear it when everyone's gone, it's very quiet, very discreet, and it passes the air and the particles over very powerful UV lamps.

“They're like sunbed lamps and as the air passes over, it neutralises all the Covid particles. It deals with flu, influenza, the common cold – it picks everything up.”

Super-deduction

However, operating in a coronavirus-secure environment was not the only benefit these machines provided the licensee.

In March 2021, the Government introduced a capital allowance scheme, which enabled taxpayers to write off the cost of certain capital assets against taxable income between 1 April 2021 and the end of March 2023.

The scheme, named ‘Super Deduction’, was introduced following the Covid-19 pandemic causing existing low levels of business investment to fall, with a reduction of 11.6% between the third quarter of 2019 and the third quarter of 2020.

Taxpaying businesses have received a 130% super-deduction for investments in plant and machinery assets, which allows investing companies to lower corporation tax bills.

Keeping public and staff safe

Vidic explained businesses like his, which have this type of air purification technology, should receive exemption certificates from any future closures the Government might impose as it has enabled him to continue serving customers while keeping them and staff safe from coronavirus.

He said: “To me it’s a no-brainer and it works. We're doing our best to keep the public and my staff safe.

“It's an investment, but it gives covid security, it gives the biosecurity protection to your customers and yourself.”