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Brit­ish busi­nesses will be offered £27bn in tax relief.

 

high street
Brit­ish busi­nesses will be offered £27bn in tax relief for the next three years to boost invest­ment as the gov­ern­ment seeks to jump-start eco­nomic growth.

Jeremy Hunt, the chan­cel­lor, set out plans to make the UK «the best place in Europe for com­pan­ies to loc­ate, invest and grow» with incent­ives to off­set the most significant rise in cor­por­a­tion tax in more than four dec­ades.

Hunt had been cri­ti­cised by some Con­ser­vat­ive MPs for lift­ing the rate of cor­por­a­tion tax but sought to win over scep­tics by announ­cing £9bn a year of «full expens­ing» for cap­ital invest­ment by com­pan­ies.

Mat­thew Fell, interim dir­ector-gen­eral of the CBI, said full expens­ing would «keep the UK at the top table for attract­ing invest­ment and put us on an essen­tial path to a more pro­duct­ive eco­nomy».

The employ­ers’ group has estim­ated that a per­man­ent ver­sion of the scheme — which Hunt said yes­ter­day he wanted to imple­ment «as soon as we can respons­ibly do so» — could boost gross domestic product by up to 2 per cent, or £50bn, by 2030-31.

Kitty Ussher, chief eco­nom­ist at the Insti­tute of Dir­ect­ors, a busi­ness group, said the scheme «sim­pli­fies the sys­tem, removes con­fu­sion and cru­cially incentiv­ises invest­ment by redu­cing the upfront cash flow risk».

Before the Budget, busi­ness lead­ers warned that push­ing ahead with both policies would make the UK one of the least com­pet­it­ive nations in the OECD for busi­ness invest­ment and lob­bied strongly for a replace­ment to the super-deduc­tion scheme.

Under full expens­ing, the gov­ern­ment said the UK would have the joint highest net present value for cap­ital allow­ances in the OECD along­side coun­tries such as the US.

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Comments

  1. Herbert16 March 2023 at 11:05

    Upfront cash flow is essential for most businesses so this looks like a very good measure. It will surely attract more investments in the UK

    ReplyDelete
  2. Mike16 March 2023 at 14:07

    It's a good start. Let's see what they do next and how this is actually implemented. It's one thing to talk and another to actually make sure the money ends up where it should, quickly. A lot of small businesses need this money within days. Weeks could mean they go out of business.

    ReplyDelete

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