Chancellor Jeremy Hunt used his Autumn Statement to make Full Expensing permanent for those businesses investing in IT equipment, plant and machinery.
The Chancellor said he was aiming to stimulate economic growth and highlighted 110 measures for businesses in the Statement.
Full Expensing was first announced in the March Budget and was scheduled to last for three years. The rules allow a 100% write-off on qualifying expenditure on most plant and machinery (excluding cars) as long as it is unused and not second-hand.
Mr Hunt has now made it permanent and said it represents the ‘largest business tax cut in modern British history‘, worth £11 billion per annum.
The Chancellor also extended the tax reliefs and incentives for Freeports and the Investment Zones programme from five to ten years. In addition, he announced three advanced manufacturing Investment Zones, which will be established in Greater Manchester, the East Midlands and the West Midlands.
There is also a business rates support package worth £4.3 billion over the next five years to help high streets and protect small businesses. This includes a rollover of the 75% retail, hospitality and leisure relief.
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.’