Veritas along with other industry leaders are about to submit our views to HMRC giving our recomendations for the reform of the capital allwoances regime for UK taxpayers. The Chancellor Rishi Sunak called on businesses of all sizes to have their say, after his Spring Statement pledged to look at how to sustainably cut and reform business taxes ahead of the Autumn Budget.
The publication sets out how firms can work with the government on capital allowances to help foster a new culture of enterprise and growth in the UK, with responses requested by 1 July 2022.
Chancellor Rishi Sunak said:I want to build on the momentum of the super-deduction to drive and sustain growth in the UK, and we’re committed to doing that through cutting and reforming investment taxes.
Today we take another step forward in delivering on that – and I encourage businesses of all sizes, right across the UK, to have their say.
The UK has a long-standing issue with productivity and one of the key underlying causes is a lack of capital investment.
According to OECD data, companies invest just 10% of GDP each year, compared with 14% in our competitor countries – our tax system doesn’t reward investment as much as other countries do.
The government is investing £600 billion over the next five years and ministers want businesses to invest more too.
Ahead of the end of the super-deduction, the largest two-year business tax cut in modern British history, next year, the Spring Statement set out some illustrations of the types of changes government could make to the current capital allowances regime. The statement delves into those options in further detail but for the purposes of this short article the proposals include:
While some business organisations have called for full expensing to be introduced following the super-deduction, this could cost over £11 billion a year. The government was keen to hear our views as to whether that would be well targeted if funding is available, and if it isn’t available, how to best target the approach.
The current system of capital allowances – As set out at Spring Statement, the government acknowledges that the generosity of the permanent system of capital allowances compares unfavourably to international peers and wants to know what more the capital allowances regime can do to support business investment.
Capital Allowances is a tax relief available when developing, extending, refurbishing or buying property.Maximising the tax relief requires detailed knowledge of the Capital Allowances legislation,…
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