FULL tax relief will continue to be given on investments of up to £1 million on plant machinery, UK chancellor Kwasi Kwarteng has announced in his ‘mini-budget’.
The allowance had initially been planned to fall to £200,000, however the chancellor said the UK Government will ‘do more to encourage private investment’.
He continued, “The annual investment allowance, which gives 100% tax relief on investments in plant and machinery, will not fall to £200,000 as planned… It will remain at £1m, and it will do so permanently.”
Following Kwasi Kwarteng’s statement earlier today, Kevin Minton, chief executive of the Construction Plant-hire Association (CPA), said, “We welcome the government’s renewed focus and commitment to growth.
“Setting the annual investment allowance at a permanent level of £1 million is a welcome step in boosting business investment and echoes our calls for certainty and consistency in the tax system.”
Suneeta Johal, chief executive of the Construction Equipment Association (CEA), commented, “The decision to make the annual investment Allowance, which gives 100% tax relief on investments in plant and machinery to be ‘permanently’ set at £1million is what manufacturers and association representatives have been requesting for some time, so this is most welcome – it’s good to have stability which will allow forward planning and encourage investment. We also welcome the £500 million to support new innovative funds in UK tech and science scale-ups, which will further encourage investment.
“The reversal of the national insurance rise and the cancellation of the planned rise in corporation tax has been well received. The corporation tax rise had not yet been implemented so freezing something that hasn’t happened yet does not encourage growth – so there’s no ‘reduction’ – the situation remains the same. The standard income tax rate deduction to 19p in 2023 is encouraging – but we would have liked to see business rates reduced.”
