In today's Spring Budget speech, Chancellor Jeremy Hunt announced a new "full expensing policy" to encourage business investment.
From April 2023 to March 2026, companies can claim 100% capital allowances on qualifying plant and machinery, writing off the cost of investment in one go.
The policy comes as the existing super deduction, which provides a 130% capital allowance on qualifying plant and machinery investments (plus a 50% first-year allowance for qualifying special rate assets), is set to come to an end on 31 March 2023.
The Chancellor said he was introducing the scheme "with an intention to make it permanent as soon as we can responsibly do so."
Kitty Ussher, Chief Economist at the Institute of Directors, commented:
"Our economy has been held back in recent years because people running businesses have felt nervous of committing to investment when the climate is so uncertain.
"The introduction of 100% full expensing for the next three years is therefore very welcome, and we urge it to be continued thereafter.
The Chancellor also announced an enhanced credit for R&D, extensions to creative industry tax reliefs, and a set of 12 new investment zones across the UK.
Talk to us about how the Spring Budget measures affect your business.