FLA urges Gov’t to include leasing in Super Deductions

T

he Finance & Leasing Association (FLA) has urged the UK Government to include leasing and plant hire in its measures to bring tax relief for companies looking to spend on plant and machinery.

The FLA has urged the Government to make changes to its Super Deduction tax incentives that ensure leasing is included in the 130% allowance attracted by new plant and machinery investments under the scheme which was announced in Chancellor Rishi Sunak’s March Budget.

According to the FLA, the proposed change could help boost the economy at a time when some businesses can ill-afford to make large capital expenditures. For others, these options make good business sense because the assets will only be used for limited periods or need to be updated regularly, the FLA said.

Stephen Haddrill, director general of the FLA, said: “The Government’s decision to restrict the scope of the super deduction amounts to a serious missed opportunity to boost investment.

“The idea that businesses grow and become more productive by buying plant and machinery outright is out-dated. Leasing and hire make far more sense.

“It preserves cash in the business and can avoid having expensive equipment that stands idle.

“70% of construction plant and machinery is hired in for specific periods for this reason. Government support needs to be designed around the way business is actually done not around the way HMRC still thinks it is done.”

Joining the FLA in its petition of the UK Government was the British Vehicle Rental and Leasing Association (BVRLA), which expressed disappointment that leased vehicles were omitted from the eligibility criteria of Super Deduction.