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Discussions on reform of capital allowances begin

13 May 2022
Issue: 4840 / Categories: News

The Treasury has published a document inviting views on how to reform capital allowances.

The Spring Statement set out some illustrations of the types of changes the government could make to the regime. This publication provides more detail on the types of changes areas of interest and how to respond.

The government would welcome views on these options:

  • increasing the permanent level of the annual investment allowance;
  • increasing the rates of writing down allowances;
  • introducing general first-year allowances (FYAs) for qualifying expenditure on plant and machinery or an additional FYA;
  • permanent full expensing

The document also highlights three further areas of interest:

  • how firms make investment decisions the relative importance of capital allowances in those decisions and how they are taken into account;
  • the impact of the super deduction;
  • what more the capital allowances regime can do to support business investment given that the generosity of the system compares unfavourably...

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