Jeremy Hunt may give UK firms tax relief on capital investment
Jeremy Hunt is considering giving UK companies tax relief on capital investment at next week’s budget to offset a sharp rise in corporation tax from April and the end of the government’s £25bn “super-deduction” regime.
Business leaders and some Conservative MPs have called on the chancellor to soften the planned rise in corporation tax from 19% to 25% to allay growing fears over the health of the British economy and faltering levels of company investment.
Bosses and the Labour party have warned that Britain is falling down global league tables amid furious lobbying in the run-up to the budget, with companies urging Hunt to offer fresh tax breaks to replace the super-deduction – a two-year scheme offering firms 130% relief on productivity-boosting investments.
Hunt is understood to have dusted down the results of a consultation launched by Rishi Sunak last year while he was still chancellor, which set out a range of options for replacing the tax break when it expires on 1 April.
Options include “full expensing” of company investment, which would allow qualifying expenditure to be written off in the year it is incurred. However, the Treasury has estimated it could cost £11bn a year.
Sources said the position of the government finances had changed since the consultation was launched. At the time, the Treasury said it wanted to hear if such a scheme would be well targeted if funding was available, and if it wasn’t, how to best target its approach.
Earlier this year the Confederation of British Industry lobby group proposed a “three-year roadmap” to full expensing, starting with a 50% investment allowance from this April, with an initial price tag of between £1.2bn and £2.5bn.
Hunt has said his ambition is for Britain to have
Read more on theguardian.com
