IoD calls for permanent super deduction
1st July 2022
Members of the Institute of Directors (IoD) are hoping for the current super deduction to be made permanent, according to a recent poll by the group.
The super deduction was introduced in Budget 2021 for two years, to increase levels of business investment to help the economy recover from the COVID19 pandemic.
It allows companies to claim a 130% capital allowance on qualifying plant and machinery investments.
Of the firms which depend on fixed capital, 13% reported that the super deduction had a direct impact on the level of investment carried out in the years 2021 to 2023. Half of these investments were new as a direct result of the deduction.
Kitty Usher, chief economist at the IoD, said:
"The Chancellor has already said he is considering using the tax system to incentivise greater business investment. Our data shows the positive impact the super-deduction has already had in doing just that. We are therefore calling for the Chancellor to make it a permanent feature of doing business in Britain.
"It is wrong to look at declining overall levels of business investment in recent months and conclude that the super-deduction has not worked. Instead, our data shows that even less investment would have taken place if the super-deduction did not exist."
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