One of the UK’s leading business groups urged the government to bring in a new tax deduction system to boost private sector investment and drive greater economic growth.
(Bloomberg) — One of the UK’s leading business groups urged the government to bring in a new tax deduction system to boost private sector investment and drive greater economic growth.
The Confederation of British Industry said Tuesday that companies would spend an extra £52 billion ($63 billion) a year by 2030-31 if they could fully expense capital spending.
The call came a day before Chancellor of the Exchequer Jeremy Hunt’s latest budget, during which he is expected to announce new measures to encourage investment.
Read More: UK Plans £11 Billion Full Expensing Business Tax Break in Budget
The so-called super-deduction, brought in when Rishi Sunak was Chancellor, expires next month and lobby groups have been calling for a replacement to offset a planned increase in corporation tax.
Brian McBride, the CBI’s president, said the UK will fall from having the fifth most competitive capital investment tax incentives in the OECD to its previous ranking of 30th if the super-deduction is not replaced.
“Our proposals on capital allowances would free up cash so businesses can invest more, and more quickly,” McBride said.
The UK has suffered from stagnant levels of investment, and weak productivity, since the Brexit vote in 2016.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.