How to Buy IT With Ease
George Smith interviewed Rob Partridge from our finance partner, Synergi Finance, about The Recovery Loan Scheme and how it can be used by businesses for IT and software purchases. Watch the video below to find out more.
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The Coronavirus pandemic has made business very difficult for companies across the world. And, here in the UK, our government offered support in the form of the Bounce Back Loans, CBILS, and CLBILS.
These schemes helped businesses by allowing them to apply for funding with 12 months payment-free and with no interest accrued. Lenders were also given an 80% guarantee in order to give them confidence to lend to these struggling companies.
However, such measures came to an end on the 31st of March 2021. They were then replaced with the Recovery Loan Scheme, which commenced on the 6th of April.
This scheme is similar to the Bounce Back Loans and CBILS, in that applications will receive 80% backing from the government.
That being said, there is no longer a payment and interest free period. Some lenders are offering lower payments at the start of the term, but this is up to the lender. It is not universal and is not a mandatory element of the scheme.
Despite what the name suggests, the Recovery Loan Scheme does not strictly offer term loans to borrower. They can actually receive:
This means that a borrower could get IT and software products through an asset finance facility, like a lease, using the Recovery Loan Scheme.
A business can take advantage of this scheme if they meet the following criteria:
They must also apply before the deadline of the 31st of December 2021.
The 130% Super Deduction Tax Scheme was launched at the same time as the Recovery Loan Scheme. It allows businesses to claim 130% first-year relief, in the form of capital allowances, on qualifying plant and machinery investments.
Fortunately, the spectrum of assets that are included under the name of ‘plant and machinery’ is very broad. And, on the list of qualifying assets, IT and software can be found.
What this means is that a business will receive 25p off their Corporation Tax bill for every £1 that they spend on the aforementioned assets.The investment must be made between the 1st of April 2021 and the 31st of March 2023 and the products themselves must be new.
If a business were to buy IT or software, they could receive 130% Super Deduction tax benefits, depending on their payment method.
If they were to pay cash for these assets, they would receive the tax benefits without question. And they could also qualify for the Super Deduction if they were to acquire the products on finance.
The only condition on the finance option is that the customer must own the product ‘title’ to qualify.
This is because the asset needs to be visible on their company balance sheet in order to qualify for the relief.
Synergi Partner Finance are a B2B brokerage that are partnered with the HBP Group.
Companies which seek an alternative payment option on their IT and software solutions with HBP can benefit from Synergi, who have access to over 100 UK and European lending streams.
Synergi have trading agreements and successful working relationships with various commercial lenders on the Recovery Loan Scheme panel.
They can also recommend the best asset finance facility for your business, in order to qualify for the 130% Super Deduction Scheme.
Businesses that are interested in utilising both schemes can view the different types of asset finance on offer at Synergi by visiting their website.
Our organisation consists of three businesses; HBP Systems Ltd. Kamarin Computers Ltd and Jugo Systems. HBP are based in Lincolnshire, Kamarin in Cambridgeshire and Jugo in Hampshire. Between us we cover the vast majority of the UK and work under The HBP Group name to provide a seamless service between our northern and southern offices.
About UsWe specialise in providing IT solutions and support to businesses to ensure they use technology effectively and efficiently and can focus on what they do best – running their business.
