AN extension of the furlough scheme to the end of September and the introduction of a ‘super-deduction’ tax policy for capital investments were among chancellor Rishi Sunak’s announcements in the spring budget.
From April, the super-deduction will cut firms’ tax bills by 25 pence for every pound they invest in new equipment. Rob Oliver, CEO of the Construction Equipment Association (CEA), said, “The announcement of a super-deduction for capital investment should stimulate decisions from companies currently undecided about their expenditure plans. For every £100 they spend they will receive a tax credit of £130. The ability to carry back company losses for three years against earlier profits will also help the cash flow of many companies.
“I believe that the super-deduction is based on a scheme successfully introduced in Slovakia. We look forward to reviewing the details, but on the face of it, it looks like it will be a great time to renew the machine fleets of plant hirers and contractors. These tax concessions are clearly a quid pro quo for swallowing a corporation tax hike in the future.”
Andrew Morrison, founder of AM Bid, Scotland’s largest bids and tenders specialist, said, “There were some examples of funding/expenditure that will find their way to opportunities for Scottish businesses. The private housing sector is being further supported via mortgage guarantees for borrowers with a 5% deposit – more private housebuilding should also see more social housing being provided. Many of the announcements in the budget will find their way into public sector contract opportunities. Given this, I would advise businesses to study the budget statement and give early consideration to how they can take steps to grow back better. For example, accessing specialist advice on how to bid successfully for public sector contracts will be very important for many businesses. Securing public sector contracts helps sustain and create jobs.
“No doubt the Scottish business sector will now turn its attention to Holyrood to see how the Scottish Government plans to allocate the additional funding coming their way.”
Brian Berry, chief executive of the Federation of Master Builders (FMB), said that builders who are struggling to recover from the pandemic will welcome the extension of Covid-related support schemes, particularly those in Scotland who are still unable to work inside people’s homes. However, he accused the chancellor of missing an opportunity to ‘show global leadership’ with regards to a long-term plan to make homes ‘greener, healthier, and more affordable to run’.
“The government’s commitment to green growth must include backing for a National Retrofit Strategy – an oven-ready infrastructure plan that will tackle climate change, level up and create jobs,” Mr Berry said. “While we welcome the funding announced for the UK Infrastructure Bank, we expect to see it use its focus on climate change and regional growth to back Britain’s army of small builders who stand ready to help build back better, and greener.”
It was also announced that the first stage of the North Sea transition deal will be delivered through the creation of a £5 million Global Underwater Hub as well as a £27 million investment into the Aberdeen Energy Transition Zone.
Rishi Sunak also confirmed that Ayrshire, Argyll & Bute, and Falkirk growth deals will receive fast-tracked funding.