THE Construction Equipment Association (CEA), Construction Plant Hire Association (CPA), and Hire Association Europe (HAE) have jointly sent a letter to UK chancellor Rachel Reeves, urging the government to increase the full expensing allowance for short-term rented plant in the construction sector.
The proposal highlights the potential for a £26 million net benefit to the Exchequer, alongside a boost to the capacity of the National Infrastructure Pipeline and housebuilding initiatives.
The industry leaders argue that extending full expensing to short-term rented plant, which is currently excluded if rented without an operator, would correct an existing ‘anomaly’ and simplify the tax system.
Under current rules, plant rented with an operator qualifies for full expensing relief as it is considered a service. However, plant rented without an operator does not qualify due to restrictions on assets deemed as ‘leased’. The trade bodies claim the proposed change would streamline the tax framework, promoting further investment in new plant and machinery.
This targeted incentive aims to encourage investment in modern equipment, thereby enhancing productivity and capacity across the industry. Importantly, the proposed adjustment would remain focused, ensuring that non-qualifying assets such as cars are excluded from the benefit. Legislative measures would also be necessary to ensure that the assets remain within the UK and to prevent double claims.
