Press Release

THOUSANDS OF SMES STILL MISSING OUT THROUGH BUDGET CORPORATION TAX PACKAGE, SAYS FLA 

21 March 2007
Commenting on the Chancellor’s Budget announcement on changing corporation tax, Martin Hall, Director General of the Finance & Leasing Association, commented:

“We’ll have to study the fine print, but at first sight this looks like another missed opportunity. By excluding leased assets for SMEs from the package and re-jigging allowances the way he has, the Chancellor has strengthened the current discrimination against leased assets in corporation tax, and he has damaged businesses – especially many thousands of UK SMEs – that want to use asset finance to protect their cash flows. I hope he will repair at least some of the damage in consulting on the new  investment allowance.”

The Chancellor announced:

i) The temporary 50% rate of first-year allowances for small enterprises will be extended for a further 12 months.

ii) A new annual investment allowance for the first £50,000 of expenditure on plant and machinery in the general pool will be introduced from 2008-09. The detailed

design and scope of this allowance will be the subject of consultation.

iii) From 2008-09 the rate of writing-down allowances for plant and machinery in the general pool will be reduced from 25% to 20%.

iv) From 2008-09 the rate of writing-down allowances on long-life asset expenditure will increase from 6% to 10%.