FILE PHOTO: British Chancellor of the Exchequer Jeremy Hunt talks to a television crew outside the BBC headquarters in London, Britain November 18, 2022. REUTERS/Henry Nicholls//File Photo/File Photo
(Reuters) – British finance minister Jeremy Hunt will hand businesses a three-year tax break worth 11 billion pounds ($13.23 billion) by replacing the UK’s investment allowance with a temporary measure in next week’s budget, Bloomberg News reported on Saturday, citing a government official with knowledge of the matter.
Hunt will limit the relief to three years and propose a permanent replacement in the ruling Conservative Party’s manifesto before the next election, the report said.
Under this replacement full-expensing regime, companies will continue to save 25 pence on their tax bill for every 1 pound invested, the report said. A previously announced increase in the headline rate of corporation tax, to 25% from 19%, is due to come into force in April.
“For the manufacturing industry… those capital allowances work, so I would say, we do want to bring down our effective corporation tax, the total amount people pay,” Hunt said earlier today in a GB News interview, referring to measures which allow companies to offset capital expenditure against their tax bill.
Hunt is due to present his budget on Wednesday.
($1 = 0.8314 pounds)