The BCC is urging the government to back long-term business investment, by introducing a permanent Annual Investment Allowance of £500,000.
Ahead of the Chancellor’s Budget announcement on March 18, the British Chambers of Commerce (BCC) is urging the government to back long-term business investment, by introducing a permanent Annual Investment Allowance of £500,000*.This would help to achieve better balanced growth and to tackle the unacceptable uncertainty created by the constant chopping and changing of UK tax structures and incentives. This uncertainty is intensified by the current political and economic climate, including the outcome of the general election.
Under current plans the Annual Investment Allowance limit will return from £500,000 to £25,000 after the latest temporary extension ends on 31st December 2015. In addition to a high, long-term Annual Investment Allowance, the BCC’s submission argues that the allowance should be widened** to include improvements to business premises, which would allow companies across the UK to boost productivity, efficiency and hiring.
Commenting, John Longworth, Director General of the British Chambers of Commerce, said:
“The huge declines in business investment at the end of 2014, and our forecast for 2015 – which predicts the slowest rate of growth for investment in six years – are a warning sign that more needs to be done to support long-term business investment.
“Businesses are operating in uncertain times – with conflict in the Middle East and Russia and a sluggish Eurozone to contend with. Yet the greatest source of uncertainty is political and home-grown. Businesses have grown tired of constant chopping and changing in the UK tax system. They need long-term certainty, rather than short-term incentives, to help support investment decisions.
“A long-term investment allowance would give businesses of all sizes much-needed certainty. Our proposals would also allow for premise improvements to be included in the scheme, which are crucial to firms looking to expand their workforce or enhance their efficiency.
“We also need to boost business investment’s contribution to GDP, as this will help us move away from an over-reliance on consumer spending, towards better balanced growth that is sustainable in the long-term. It’s time the government acknowledged that by forgoing some tax receipts in the short term, it will reap the rewards later, as businesses invest, hire and generate bigger profits.
“Apermanent Annual Investment Allowance would be a ‘triple win’ proposition – for business, for jobs, and for government.”
Caroline Williams CEO Norfolk Chamber of Commerce, said:
“The Chancellor has said that the budget is all about securing a truly national recovery from building a Northern powerhouse, connecting up other regions of our country, committing to long-term plans that support science and high-speed transport.
“What Norfolk business needs are commitment to better infrastructure road, rail, broadband and mobile, increased support to businesses wanted to increase their market share through international trade, and additional support to help our young people better understand the world of work. We will only ensure that funding comes to the east and not all to the north if our business community is more visible, and successes of getting Norwich recognised by Tech City is a great step forward.”
