Don't miss out - the clock is ticking on super tax deduction

There has never been a better time to invest in pharmacy automation and with the clock ticking on the super tax deduction rate scheme, timing is everything according to Centred Solutions Sales and Marketing Director, Louise Laban.

There’s no getting away from it, community pharmacy will play an integral part in delivering health and care services in the future. The Fuller Stocktake Report made clear that the potential to increase the role of community pharmacy is significant and speaking at NHS Confed Expo, former Health Secretary, Sajid Javid, said pharmacy was the first priority when it came to primary care reform.

Against the backdrop of an over-burdened primary care system, it’s easy to see why. A recent Pharmacy APPG debate heard pharmacy are now treating an average of 619k patients per week who would have previously visited a GP. It’s fantastic to see pharmacist’s clinical skills recognised and placed front and centre, however for them to continue this journey it’s crucial we free them up from the time-consuming logistical tasks involved in the dispensing process, a role that can easily be automated.

A number of pharmacies are already turning to hub and spoke and investing in FLOWRx technology to free up capacity. Not only are these early-adopters ensuring they are ahead of the game to keep control of their own business before legislation is passed, they’ve also received an additional financial benefit. All our current customers have been able to take advantage of the current super tax deduction rate for the technology introduced in April 2021. This has allowed them to cut their tax bill by up to 25p for every £1 spent[1]. It works by treating the company as if it had spent an extra 30 per cent on the item they are purchasing and then allowing tax relief on that new uplifted amount when calculating the annual tax bill[2].

But time is now running out for pharmacies looking to take advantage of the benefit with the initiative due to end on the March 31, 2023. We are urging pharmacies not to get caught out. If you are considering automation then now really is the time to buy.

Pharmacies should be mindful that the super-tax deduction rules have been written in such a way that they require a company to almost always own the asset for a claim to made in the year the expenditure is incurred[3]. This is different to claims for most other plant or machinery allowances where a contract stating a party “shall” of “may” become the owner of the equipment is enough to treat the “purchaser” as the owner[4]. But with the super-deduction, any expenditure incurred in a period before a legal title passes will not qualify for first year allowances. This includes contracts with deposits, staged payments or those where payment is due prior to delivery and passing of the title. [5]

Example: If a title doesn’t pass until delivery and that delivery occurs in a later period to when the expenses was incurred then that expenditure won’t qualify.

If you are considering automation then now is the time to buy to receive the full benefit. I’ve worked in the automation sector for many years so I know that the technology purchasing process can be lengthy and an install isn’t something as simple as plug and play when something as important as medication dispensing is involved. We are already seeing an increased demand for our products with installs scheduled in up until quarter 4 this year.

Always seek advice from your accountant before making a commitment to ensure it will be eligible for the tax relief However my advice would be to start discussions with suppliers now if you want to make the March 31, 2023 deadline. Don’t leave it too late – contact us today.

[1] https://www.gov.uk/guidance/super-deduction

[2] https://p3pharmacy.v2.cigdigital.net/running-your-business/making-allowances

[3] https://www.pwc.co.uk/services/tax/blog/super-deduction-timing-is-everything.html

[4] https://www.pwc.co.uk/services/tax/blog/super-deduction-timing-is-everything.html

[5] https://www.pwc.co.uk/services/tax/blog/super-deduction-timing-is-everything.html