Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether investment in software can qualify for 130 per cent super-deduction capital allowance in 2021-22 and 2022-23 under section 815 of the Corporation Tax Act 2009.

The super-deduction capital allowance will allow companies to reduce their taxable profits by 130% of the value of their investment in plant and machinery.

Investment in software can be classified as either a revenue expenditure, in which case it is deductible for tax purposes, or a capital expenditure, in which case it is generally addressed through the intangibles regime instead. This means software would be ineligible for the super-deduction.

However, if a company wishes, they can choose to make an election under s815 Corporation Tax Act 2009 to remove software from the intangibles regime and instead claim capital allowances. In this case, the super-deduction will be available.