The Chancellor Jeremy Hunt has hinted that there could be further support for businesses ahead of next week’s autumn statement.
There has been calls for lower taxes among Tory MPs to include the “hated factory tax,” and in March he announced a “full expensing” to make sure all monies invested into IT equipment of plant machinery will be deductible in full from taxable profit.
The former Chancellor Nadhim Zahawi told MPs in the House of Commons, “May I implore him to make full expensing permanent and scrap the hated factory tax.”
Jeremy Hunt said, “He is absolutely right to say how important it is to have competitive business investment taxes and I was very proud in the spring budget to introduce full expensing for three years, which gives us some of the most competitive business taxes in the OECD (Organisation for Economic Co-operation and Development) … and I will of course keep under review any possibility to extend that.”
The chair of the Commons Treasury Committee, Conservative MP Harriett Baldwin, added, “I think on this side of the House we all agree that the way to sustainable economic growth without inflation is through business investment.
“It’s early days but I wondered whether we have indications of how well the full expensing is working for encouraging business investment in this country and whether one of the measures he’s considering next week at the autumn statement is to make that full expensing permanent?”
The Chancellor told MPs, “One of the reasons our productivity is 15% lower than, for example, Germany’s is because they invest more as a proportion of their GDP (gross domestic product) every year – about 2% more – than we do in the UK.
“So improving the rate of business investment is one of the most effective ways we can boost productivity and people’s real disposable income.
“We’re very proud of what we introduced in the spring budget and we will continue to see whether it is possible to extend it further.”
Dame Priti Patel said, “In a week’s time we will have the autumn statement, may I appeal to the Chancellor in particular to look at lowering the rates of personal as well as business taxation, particularly in the areas of business rates and corporation tax, and all aspects to do with enabling people to keep more of the money that they earn.”
Treasury minister Bim Afolami replied to Patel, saying she, “ tempts me to make tax policy, the Chancellor always keeps these things under review as does the Government, and indeed we have a fiscal event shortly.”