Full Expensing Made Permanent from Chancellor
Permanent full expensing was included in Chancellor, Jeremy Hunt’s Autumn Statement. Full expensing enables businesses to remove 100% of the outlay for qualifying IT equipment and plant and machinery (it must be brand new) purchases from profits in the first year of purchase.
The benefits of full expensing include improvements in cash flow, in subsequent years where they are not paying out for the equipment, and it enables them to make significant tax savings. The Chancellor’s objective with facilitating full expensing is to stimulate economic growth and he outlined 110 measures for businesses in the Statement.
The Chancellor made his decision to implement Full Expensing in the March Budget and scheduled it to be in place for three years. Mr Hunt has since made it permanent and was quoted to say that it represents the ‘largest business tax cut in modern British history’, worth £11 billion per annum.
The Chancellor also introduced new tax reliefs and incentives in the form of extending Freeports and the Investment Zones programme from five to ten years. Three advanced manufacturing Investment Zones, established in Greater Manchester, the East Midlands and the West Midlands have also been created to allow further investment in the growth of British industry.
A business rates support package worth £4.3 billion will be made available over the next five years to support the growth of high streets and protect small businesses. The 75% retail, hospitality and leisure relief will be rolled over as part of this.
Rain Newton-Smith, Chief Executive of the Confederation of British Industry (CBI), said:
‘Making full capital expensing a permanent feature of the tax system can be transformational for accelerating growth and improving living standards in the long-term. Helping firms to unleash pent-up investment is critical to getting momentum into the economy.’
Danielle Harvey, Director at HTB expanded further on this:
“The initiatives outlined in the Autumn budget offer great opportunities to reduce expenditure and facilitate economic growth for British industry. HTB are on hand to guide you through the processes of ensuring you benefit from these government economic incentives”.
We are always here for you to contact us for support in ensuring you benefit from the Chancellor’s new initiatives.