Companies that order new forklift trucks and other materials handling equipment (MHE) in the coming months may find that they miss out on the chance to claim significant tax relief allowances on their new machinery due to the ever growing lead times currently being quoted by a number of industrial truck manufacturers.
Since April 1st 2021 businesses have been able to claim back up to 25p for every pound they invest in ‘qualifying’ machinery and equipment under the terms of the super-deduction allowance – a tax incentive designed to encourage British businesses to invest following the pandemic.
However, the super-deduction was only introduced as a temporary measure and the allowance comes to an end on March 31st 2023. Under the terms of the scheme companies only qualify for the tax relief on expenditure incurred between April 1st 2021 and March 31st 2023.
With some lift truck users currently finding that they are having to wait upwards of six months from the time that they place an order to the delivery of their new machinery there is a risk that any new equipment ordered after the beginning of November 2022 will not be ‘on site’ before the end of next March. This means that the truck user’s expenditure will be outside the super-deduction ‘window’.
Manufacturers who seek to help their customers by issuing invoices prior to any post-March 31st delivery date are likely to be considered to be facilitating ‘contrived arrangements’ that are contrary to HMRC’s anti-avoidance rules.
John Maguire, Narrow Aisle Ltd’s managing director commented: “Due to the impact of on-going supply chain problems and other issues on build times, we understand that several MHE manufacturers face serious production backlogs. Consequently, some users are being forced to operate their existing trucks for far longer than they had planned. It also means that they may miss out on the substantial tax relief that is currently available on capital equipment expenditure under the super-deduction scheme.”
Despite surging demand for its range of Flexi articulated reach truck based intralogistics solutions, recent investment at Narrow Aisle’s UK manufacturing and parts storage facility means that delivery lead times for new Flexi trucks have been maintained at normal levels.
John Maguire said: “Sales of Flexi VNA reach trucks are at an all time high. Yet, in the majority of cases, we have been able to build and deliver new trucks in under eight weeks from the date that an order is placed.
“We benchmark our production performance against similar sized operations in our sector and we know that our lead times compare very favourably.”
John Maguire adds: “With the clock ticking down to the end of the super-deduction tax relief scheme, our ability to respond to the demand for new fully configured Flexi trucks quickly and efficiently gives us – and our customers – a tremendous commercial advantage. We have recently won significant orders not just because of the quality and drivability of our Flexi products, but also thanks to the fact that we are able to build and deliver new very narrow aisle warehouse trucks within the super-deduction ‘window’.”