Making the scheme permanent could boost growth ambitions, help boost productivity and improve living standards in all countries and regions of the UK, the CBI said.
Business leaders have called on the government to make its temporary super deduction scheme permanent, saying it could boost UK business investment by up to £40billion a year by 2026.
The temporary super-deduction tax relief, introduced by the government last year, offers companies that invest in certain types of equipment, such as machinery, a much higher tax reduction than usual. It is due to expire in March 2023.
A survey of 325 businesses by the Confederation of British Industry (CBI) found that more than half of respondents have taken advantage of or plan to take advantage of the super deduction to increase or accelerate capital investment plans.
The business group said there was a risk that investment could decline when the scheme ends next year and urged the government to create a permanent 100% tax deduction for capital expenditure over the course of the year. spending year in this year’s spring statement, saying such a permanent incentive could increase annual capital spending by 17%.
“The Chancellor’s super deduction illustrates the bold public policies we need to inspire investment and get the economy moving. Based on our survey results, this appears to be a real success. It started the job but can’t be a one-hit wonder. Shifting policy from a short-term fix to a long-term strategy will give businesses confidence that government and industry are aligned,” said CBI Chief Executive Tony Danker.
“The UK is facing the highest tax burden in decades. But by rewarding companies that invest money in their operations, we can unleash new innovation and productivity – the ingredients we need to escape the low-growth trap and build a stronger, more sustainable and more economic future. fairer.