Cambs Compressors Newsletter Summer 2022

www.cambscompressors.co.uk If you invest £20,000 in a new air compressor, you will be able to deduct £26,000 from your tax bill. RED DIESEL BAN COMPRESSORS The banning of red diesel use for certain applications has had significant operational and financial impacts on some users of compressed air. What’s changed if you run your compressor on red diesel? It’s no longer legal to use red diesel for non-road using machinery such as mobile air compressors. As of 1 April 2022, red diesel is no longer available at a rebated rate for many commercial applications. Red diesel contains red dye and other chemical markers to indicate that it is rebated diesel and has therefore been subject to less fuel duty than normal (white) road fuel diesel. The red marker allows HM Revenue and Customs (HMRC) to check whether red diesel is being used illegally. The UK government announced changes to the rules on rebated diesel usage and this has since been a source of confusion and concern across UK businesses. What low cost alternatives to red diesel could run a compressor? Fossil free HVO (hydro-treated vegetable oil) is a renewable diesel replacement made to EN15940 standard. It is the lowest emission diesel replacement fuel available. HVO is made entirely from waste and is defined as renewable and sustainable (RED11), whilst being highly refined. It is a genuine green drop in alternative to diesel. You can use HVO in any diesel engine without requiring any changes to the engine. New compressors qualify for 130% super- deduction capital allowance Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances. There is not an exhaustive list of plant and machinery assets, but compressors are specifically mentioned in the example list of capital equipment in the UK Government Fact Sheet. What will you be able to claim back? n 130% super-deduction capital allowance on qualifying plant and machinery investments n 50% first-year allowance for qualifying special rate assets The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the worlds’ most competitive. It means there’s never been a better time to invest in a new compressed air solution. What does this really mean? It means you can reduce your corporation tax bill by up to 130% of any investment that you make in the next two years, including investment in new machinery such as air compressors. Example - if you purchased a £20,000 compressor “If you invest £20,000 in a new air compressor, you will be able to deduct £26,000 from your tax bill. This means, your accounts team can deduct 130% of your initial investment (£20,000) when calculating your taxable businesses profits. The super-deduction is an enhanced first-year allowance providing an allowance exceeding the cost of the asset. It makes investing now very attractive, helping save tax liabilities and aid cashflow.” Annthea Fryer Finance and HR Director Cambs Compressors 130% Capital Plant Incentive Scheme There really has never been a better time to look to improve your on-site facilities by investing in new compressed air solutions. There’s never been a better time to invest in a new lower energy use compressor, because if you purchase before March 31st, 2023 - you’ll get 130% super-deduction capital allowance Compressed air market hit by fuel duty changes New compressed air solutions with up to 130% tax relief World Health Organisation call for help Open Ventilator System Initiative (OVSI) was formed in response to the WHO’s estimate that fewer than 2,000 working ventilators were in existence across Africa. In fact when the COVID-19 pandemic struck, there were 10 countries in Africa that had no ventilators. OVSI was an initiative which brought together a consortium of academics, engineers, intensive care medics, innovators and industry partners. The Brief: To develop a new low cost, robust, oxygen concentrator. An oxygen concentrator is a type of medical device used for delivering oxygen to individuals with breathing-related disorders. They work by filtering the surrounding air, compressing it to the required density and then delivering purified medical grade oxygen into a pulse-dose delivery system or continuous stream system to the patient. Cambridge Festival praised Cambs Compressors and other local businesses for their role in a consortium which developed an oxygen concentrator which functions in tough conditions. Open Ventilator System Initiative Update Annthea Fryer Finance and HR Director, Cambs Compressors