7.9.2021 | TaxLeasing should be included in Chancellor’s super-deduction
The decision does not support agile, efficient operations.
One of the key announcements in this year’s budget was the introduction of the super-deduction – a new tax break aimed at boosting business growth.
The deduction essentially allows businesses to set 130% of the cost of purchasing new assets, including plant machinery and office equipment, against its profits.
However, business group Logistics UK and six other trade groups have written to Chancellor Rishi Sunak, arguing the deduction should also include leasing and short-term hire to allow more businesses to take advantage.
Here, Andrew Diver, Head of Taxation at Beatons Group, takes a look at the super-deduction and whether it could be extended.
The chancellor’s budget contained a raft of measures seeking to kickstart the nation’s economy as the pandemic subsides, including the super-deduction.
The tax break can be applied to a business’ asset purchases – from items such as diggers, lorries and tractors to office furniture or computer screens.
Any business that pays corporation tax can apply for the super-deduction, however, trade groups say many smaller businesses may miss out.
Leasing and short-term hire
Seven business trade groups have now written to the chancellor, arguing the eligibility criteria should include leasing and short-term hire.
Stephen Haddrill, Director General of the Finance and Leasing Association said that ‘the age of buying plant and machinery outright is long gone’ and that for many firms, it is more efficient to hire or lease machinery instead of buying it.
The trade groups have invited officials to a discussion in September to talk about the vital role leasing and hiring play in smaller companies to invest in their future.
Supporting logistics is crucial
We have recently seen the logistics sector’s huge importance in keeping our supermarket shelves stocked and our restaurants in ingredients.
With KFC and Nandos running out of chicken and Wetherspoons running out of beer, it is clear the sector needs to be supported.
It faces difficulties on a number of fronts – the disturbance caused by Brexit, the upheaval caused by the pandemic and a shortage of UK-based HGV drivers – and needs assistance to keep the country running.
I will be keeping a watchful eye on the developments and hope this month’s discussions help develop new ways to support this important industry.
For more about Beatons Group, please visit beatonsgroup.co.uk