According to recent research, the introduction of an all-new permanent investment deduction as a successor to the UK Government’s current super deduction could potentially see UK investment boosted by approximately £40 billion annually by the year 2026.
Data collected from a total of 325 firms, which included a range of sizes and different sectors, indicates the super deduction has increased investment and that a more permanent incentive could potentially trigger a yearly 17 per cent hike in capital spending. As a result, growth ambitions could be boosted, enhancing living UK living standards and raising productivity across the country.
The survey revealed that over 50 per cent of respondents enjoyed the gains of the super deduction – or still plan to, in order to accelerate or increase their capital investment plans.
Now, with the scheme due to come to an end next year, there is a tangible risk that UK business investment could wind down at a key time, when the Office of Budget Responsibility (OBR) is forecasting that post-recovery economic growth will level out at around 1.3 to 1.7 per cent. Recently, the Bank of England (BoE) issued a prediction that was even more pessimistic, anticipating growth of just 1.0 per cent in 2024.
Business groups are now urging the government to act and create a permanent 100 per cent deduction specifically for capital spending to help sustain UK business investment in 2023. Those looking to invest in businesses at home and abroad often seek out expert financial advice in Shropshire, Chester and other UK areas.