This is a government tax incentive to encourage companies to invest in Plant and Machinery (which includes IT hardware and software), in the current tax year.

This government tax incentive means 40% of the value of any IT spend can be offset against profit before tax (assuming liability for Corporation Tax), thus gaining a reduction in Corporation Tax liability, where applicable. In future years the CA benefit is 20% of the reducing balance, i.e. 20% of the remaining unclaimed percentage of asset cost.

Take this worked example, for a £100,000 IT spend: In Year 1 this would attract 40% CAs. Hence profit before tax is reduced by £40,000 for the tax calculation. This results in a reduction of Corporation Tax (assuming 28% rate) liability of £11,200 for the current tax year. As a comparison, if the investment is delayed until the 2010-2011 tax year, the CA benefit would be halved, i.e. £5,600.

To further assist IBM customers to benefit from this incentive now, IBM Global Financing is offering interest free deferred payment profiles, typically consisting of four quarterly payments, at zero interest cost, on most IBM hardware and software transactions (subject to credit and contract).

In most cases this promotion still enables you to benefit from the 2009 enhanced CAs, where eligible.

Contact our specialist commercial team today on 01792 654154 to see if we can help finance your IT hardware and software requirements.