In the March Budget, The Chancellor announced a new incentive for UK businesses. With the aim of driving investment, the new scheme provides a unique opportunity for food and drink manufacturers planning capex projects for new factories or upgrades to existing sites. Here Paul Vandrill, associate CFO at Integrated Food Projects explains how the scheme works, and why food and drink manufacturers need to be quick off the mark to take full advantage.
The new ‘super deduction’ is a welcome incentive for UK businesses, and will allow food and drink manufacturing companies to claim 130% of any qualifying plant and machinery investment as a capital allowance.
To put it simply, it will allow companies to cut their tax bill by up to 25p in every £1 invested.
Since the COVID-19 pandemic started, investment into many businesses have fallen, this scheme aims to kick-start productivity and help to drive business growth post-COVID-19.
Food and drink manufacturers who were considering or planning investment into their plants and machinery are well placed to take advantage of this scheme, as long as the investment is made within a two-year period starting 1 April 2021.
There is of course qualifying criteria for what money can be spent on, with exceptions for items such as cars, but we believe that the vast majority of purchases required in the food and drink manufacturing sector will be covered. There is a fixed end date for the scheme, so businesses will need to move quickly if they are planning on taking advantage of the savings.
At IFP we are committed to working with the very best and forward-thinking food and drink manufacturers. We have a proven track record of helping businesses deliver their vision of what a factory of the future looks like and can achieve.
Investment into purpose-led projects, with a focus on sustainability and reducing the environmental impact of the food and drink manufacturing process has been central to most of the projects the IFP team has worked on in recent years. This, alongside an increase in the use of automation and AI in factories will be key investment opportunities for food and drink manufacturers looking to take advantage of the Super Deduction over the next 24 months.
The team at IFP is always to hand to speak to you and share our expert advice and experience of capital investment projects in the food and drink manufacturing sector.
Integrated Food Projects have partnered with Kettleby Foods on a number of high-profile multi-million pound capital projects since 2003/4, helping the business to develop and grow. Throughout that time they have provided cost-effective and efficient solutions on development projects both at our existing ready meals production facility and also in creating a new satellite facility. The projects at our existing facility were managed without impact on our ability to service our own clients, and all projects have been delivered within budget, in a timely fashion and to the requisite standards of safety and quality. Their team work ethos and professional approach ensure successful projects and I would utilise Integrated Food Projects in the future without hesitation.
- Jarrod Thorndyke, Production Director
I have worked with Integrated Food Projects on many capital expenditure projects since 2004, the latest being the development of the new plot of land adjacent to our main site. They successfully employed a project delivery process to ensure the integration of a leased modular building solution with the development of the site infrastructure to improve logistics and Health and Safety. Their staff are always positive and enthusiastic and have fostered a team-work approach ensuring another successful project delivered. I look forward to working with them again in the near future.
- Engineering Manager, Major UK Ready Meals Manufacturer