Skip to main content

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.

www.sba.tax

Labels:

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

Post a Comment

Cloud Bookkeeping

US FED rate rise.

  The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...
Post a Comment
Read more

EU business slide.

  S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...
1 comment
Read more

Tariffs on UK electric cars.

  The European Commission has confirmed that it will continue with its plan to impose tariffs on electric cars exported between the UK and EU starting next year. This is due to the "rules of origin" requirement that mandates EVs traded across the English Channel to have 60% of their battery and 45% of their parts sourced from the EU or UK or face a 10% tariff. A senior Commission official, Richard Szostak, recently informed parliamentarians from the UK and EU that the bloc's battery investment has significantly declined, making the tariffs necessary to encourage domestic production. In 2022, the EU's share of global investment in battery production shrank from 41% to only 2% after the US offered substantial subsidies through its Inflation Reduction Act. Starting in 2024, car manufacturers in the UK will need to have 22% of their sales come from zero-emission vehicles, which means they may need to import EVs from the continent to meet this requirement. If EU carmakers ...
Post a Comment
Read more