The Finance & Leasing Association (FLA) has urged the UK Government to include leasing and plant hire in its measures to bring tax relief for companies looking to spend on plant and machinery.
The FLA has urged the Government to make changes to its Super Deduction tax incentives that ensure leasing is included in the 130% allowance attracted by new plant and machinery investments under the scheme which was announced in Chancellor Rishi Sunak’s March Budget.
According to the FLA, the proposed change could help boost the economy at a time when some businesses can ill-afford to make large capital expenditures. For others, these options make good business sense because the assets will only be used for limited periods or need to be updated regularly, the FLA said.
Stephen Haddrill, director general of the FLA, said: “The Government’s decision to restrict the scope of the super deduction amounts to a serious missed opportunity to boost investment.
“The idea that businesses grow and become more productive by buying plant and machinery outright is out-dated. Leasing and hire make far more sense.
“It preserves cash in the business and can avoid having expensive equipment that stands idle.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“70% of construction plant and machinery is hired in for specific periods for this reason. Government support needs to be designed around the way business is actually done not around the way HMRC still thinks it is done.”
Motor finance
Joining the FLA in its petition of the UK Government was the British Vehicle Rental and Leasing Association (BVRLA). Gerry Keaney, chief executive of the BVRLA, said: “The Government understands the important role that the vehicle leasing sector plays in delivering the UK’s road transport decarbonisation goals.
“This makes it all the more disappointing that leased vehicles have been omitted from the eligibility criteria of Super Deduction.
“This is a huge oversight and is an example of where the Government has failed to align its fiscal and environmental policies.
“An increasing number of individuals and businesses are turning to the leasing sector for cleaner vehicles, but the sector has not been immune to the impact of the Covid pandemic.
“With Clean Air Zones popping up around the UK, this is the perfect time to incentivise the uptake of low- and zero-emission vehicles and leasing enables businesses to keep their cash to help get them through the recovery period.
“Making leased vehicles eligible for Super Deduction would provide a boost to many businesses and would be a welcome shot in the arm for fleets.”
