BRITAIN could receive a £1 billion boost if the Chancellor made a tax break to make long-term business investment permanent, the CBI said today.
The call to make the annual investment allowance (AIA) of at least £250,000 permanent from 2016 is one of a number of measures outlined in a pre-Budget submission from the business lobby group.
It argues that the commitment on the allowance, which allows firms to claim tax relief on new plant and machinery, would support long-term investment among small and medium-sized enterprises and potentially add £1bn to UK gross domestic product by 2020.
In its Treasury submission, ahead of the Chancellor’s Commons statement on 8 July, the CBI also calls for “clear detail” on fiscal rules and on future debt reduction “to strengthen business confidence”, a commitment to introduce a “comprehensive business tax roadmap” and a five-point action plan to boost productivity, including encouraging innovation and shoring up exports.
The CBI’s director-general, John Cridland, said: “As the new government gets its feet under the table, it’s important to seal in the progress made restoring the public finances in the last five years and maintain a strong focus on growth and investment.
“Businesses want the government to chart a clear and stable course on getting the deficit down. And they want to know exactly how this will be done, and when it will be done by.”
He added: “Making the AIA permanent will help our businesses invest in new equipment to fully unlock their potential, especially when it comes to exporting British goods to high-growth markets.”