Automation is likely to play a pivotal role shoring up the UK’s manufacturing industries as businesses learn to cope with fluctuating demands. Companies investigating ways to automate packaging activities have been given a new incentive by the Chancellor that will help the business case for Plant & Machinery investment by reducing corporation tax liabilities. Our Finance Director, Janet Thorpe looks at the benefits of automation and how this new ‘Super Deduction’ could be the perfect opportunity to embrace change.
There is an established link between automation and increased productivity making it the ideal time for manufacturers to look to the future and make the investment in automation. Companies that have experienced increasing demand through the lockdown period are now looking to invest in packaging line improvements to help them increase productivity and efficiency, as well as mitigating the risk of loss of output from virus-related shutdowns.
Projects to improve throughput and build in resilience by automating label print and apply operations can now benefit from 130% capital allowance in the first year. This substantial saving is applicable for plant and machinery investment from the 1st of April 2021, qualifying for the new ‘Super Deduction’ which is offset against taxable profits.
Automating the labelling process is now being included in end-to-end automation projects with manufacturers aiming for fewer people along the packing line. While Coronavirus undoubtedly put a strain on global productivity, the introduction of social distancing and spacing has caused major challenges, drastically reducing the speed of throughput and slowing down production (read our previous blog for more on Social Distancing on the Packaging Line). Manufacturers are taking this as an opportunity to plug the gaps in their automation process which previously may not have been considered a priority and this is where print and apply labelling systems can help.
For some manufacturers there may have been a wariness in the past to make process changes with automation, either because of manual processes being well established or because of the risk that some new technologies can bring. COVID-19 has emphasised the requirement for updating of manual practises that could stop a quick recovery once social distancing measures are lifted. Through education about the benefits of packaging automation and the labelling process, along with the Super-Deduction tax allowance, manufacturers can embrace the change and take advantage of this boost.
From 1st April 2021 until 31st March 2022, the tax break will give 25p off company tax bills for every £1 spent on qualifying plant and machinery, including print and apply labelling systems. By integrating automation onto their packaging lines, manufacturers not only reap the benefits of immediate productivity increases and reduced waste, but they prepare their businesses for any future crisis.
All Cobalt’s print and apply systems are designed and manufactured in the UK and are supplied with a 3-year warranty as standard. A Cobalt label and seal solution includes pack table, case closing, case sealing and labels printed and applied, all in one small footprint. Get in touch to discover the benefits of barcode labelling automation for packs, cases and pallets.