CBI urges a permanent tax break for investment

Cridland wants to focus on growth. Picture: TSPL

Cridland wants to focus on growth. Picture: TSPL

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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.”

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