Wondering whether the time is right to upgrade or replace your printer or digital press? Looking to add green infrastructure to lower your electricity bills but keep prints rolling off your devices?
In this post, we look at temporary tax reliefs that might help you decide whether or not to invest in something new in 2022. We also look at some other funding sources that might be appropriate for your project.
How has the funding landscape changed since late 2020?
Back in October 2020, we looked at types of equipment investment (such as hire purchase or leasing) and how you might access funding to support your print service. At the time, we were still in the first year of the pandemic, and there was a lot of uncertainty about future restrictions.
Then, we wrote about several Coronavirus funds offered by the government. Most of those schemes have now closed; CBILS, for example, closed to applications in March 2021.
We may not be in the depths of a lockdown in June 2022, but business uncertainty continues; Brexit, war in Ukraine, supply chain challenges, inflation and rising energy and fuel prices. However, there is still some support out there.
First Copy would always suggest discussing these measures and grants with your accountants to learn more about how they could support your business.
Temporary tax reliefs on plant and machinery investments
The government announced new temporary tax reliefs on qualifying capital asset investments just over a year ago. These apply to companies paying Corporation Tax who invest in new plant and machinery.
Until (at the time of writing) 31 March 2023, companies can increase relief in return for expenditure on many kinds of equipment – perhaps we might suggest your next digital print platform!?
In their own words, gov.uk explains that companies can claim, during the period of investment:
a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances
So, you can claim 130% of your equipment spend against your business’ taxable profits with this super-deduction tax break.
What does that mean? In plain English, if you spend £100,000 on a new press, your associated corporation tax deduction would be £130,000 in the first year.
Plant and machinery investments must be NEW to meet the criteria. In addition, the scheme can only be applied to cash purchases or hire purchase agreements; leasing and renting do not qualify.
The measure includes much more than print and office technology; it can extend to solar panels, commercial vehicles, electric car charging points and much more. The right investment could lower your ongoing energy and fuel costs, too!
Although there are some exclusions, this measure could save you a significant amount on your tax bills: First Copy suggests discussing your options with your financial partners to see if using this measure is an option for your business.
To see how the temporary tax relief on machinery investments can benefit you, please see our case study on Kellmatt, a business that used this to invest in a second Xerox Iridesse Production Press.
Recovery Loan Scheme
The deadline is fast approaching, but the government has extended its Recovery Loan Scheme (RLS) until the end of June 2022 for small and medium-sized enterprises.
The RLS aims to help businesses recover from the pandemic. Loans from £25,001 up to £2 million for a maximum of six years are available, but the amount actually offered will depend on participating lenders. The government guarantees 70% of the finance, although as a borrower, you are liable for 100% of the debt.
These figures are a reduction relative to the support available last year, but the RLS remains an option for some print companies.
To qualify, you must be trading in the UK. You must also show evidence that your business would be viable but for the impacts of COVID-19, that you have been negatively affected by the pandemic and that you are not already in collective insolvency proceedings.
Further details can be found on the government website, but you must act fast!
Local Enterprise Partnership (LEP) and Growth Hub Grants and Loans
A Local Enterprise Partnership (LEP) is a locally-managed partnership between public sector authorities and businesses. The 38 LEPs across the country support local economic priorities. The idea is that the Boards running the LEPs are business-led, made up of local representatives of industry, education, voluntary groups and local authorities: people who know what the area needs.
Growth Hubs are public/private sector partnerships led by their local LEPs. Each Growth Hub offers a first point of contact for local businesses and startups, joining up national and local support in an effort to make that support easier to find.
To give an example, in Norfolk and Suffolk, New Anglia LEP aims to grow the economy and create 88,000 jobs and 30,000 new businesses. The associated Growth Hub brings those goals down to individual companies, offering free and impartial advice and support to access grant funding.
How could your local Growth Hub help you with finance? They can help you navigate the sea of funding options that could be appropriate for you and your business. For example, there may be opportunities to access the Growth Through Innovation Fund, Small Grant Scheme, Growing Places Fund, or explain Growth Works, Cash Back Grants, Business Boosts…the list goes on.
Each area has access to different funding pots and schemes. Please speak to your local Growth Hub to find out more. You might also like to try your local Business and Intellectual Property Centre (BIPC), where businesses can access lots of information about funding, as well as other advice and databases.
Which is my local Growth Hub or BIPC?
Find a complete list of LEP Growth Hub contacts here.
For BIPCs, visit the British Library’s website.
We haven’t listed all of the Growth Hubs here, but some of our closest include the following. We have linked straight to the relevant funding pages:
New Anglia Growth Hub
Cambridge & Peterborough Combined Authority
South East Business Hub
Which funding option is the best for my business?
The best funding option for you will depend on your investment priorities, whether you have an existing business or are looking to startup, and what is available in your area.
The Temporary Tax Relief measure is only helpful if you’re happy to invest in a hire purchase or make a cash purchase of new equipment. Local funding may be a better option if you prefer to lease.
Each option will come with different criteria; perhaps you will need to show you are making environmental improvements, constructing new infrastructure or undertaking research and development.
As with all investment decisions, access support and advice to ensure you’re making the best decision for you and your business. First Copy’s specialists will be delighted to discuss your options and point you in the right direction.
