UK News

Jeremy Hunt provides ‘biggest business tax cut in modern history’

In what he called the biggest business tax cut in modern UK history, the Chancellor unveiled an Autumn Statement package of 110 measures in a bid to boost growth.

He announced a tax break allowing businesses to cut bills if they invest in new equipment would be made permanent.

The policy, known as “full-expensing”, means companies can take the cost of plant and machinery out of their pre-tax profits, ­saving them from having to pay levies on the equipment.

It aims to encourage firms to invest, and in turn, lead to ­economic growth.

Mr Hunt said a company would shave £250,000 off their tax bill in the same year for every £1million it invested.

Saying the UK could become Europe’s “most prosperous” economy, he added: “In the face of global challenges, we have halved inflation, reduced our debt and grown our economy. As a country we are sticking to a plan that is working.

“This Autumn Statement for growth will attract £20billion more business investment a year in the next decade, bring tens of thousands more people into work and support our fastest growing industries.

“In a package which leaves borrowing lower, debt lower, and keeps inflation falling, we are delivering the biggest business tax cut in modern British history, the largest-ever cut to employee and self-employed National Insurance and the biggest package of tax cuts to be implemented since the 1980s.

“An Autumn Statement for a country that has turned a corner.”

Mr Hunt also slashed National Insurance contributions for the self-employed, abolishing Class 2 levies and reducing Class 4 rates.

He said it would put £350 in the pockets of two million workers, the people who “kept our country ­running” during Covid.

Andy Chamberlain, of the Association of Independent Professionals and the Self-Employed, said support from the Government was a “welcome relief”.

But he said the self-employed sector was “still reeling from gaping gaps in support during the pandemic and the implementation of the off-payroll working rules, which have had a devastating impact on hundreds of thousands”. He added: “Today’s announcement is a welcome step in the right direction, but the Govern­ment still has much more to do ­ to win back the support of the sector.”

Hospitality bosses and consumers breathed a sigh of relief at a freeze on alcohol tax as the festive season looms.

Duty on hand-rolling tobacco will rise by an extra 10% but levies on beer, cider, wine and spirits will be frozen until next August. The Wine and Spirit Trade Association said businesses had been bracing for a second duty increase in Mr Hunt’s address.

It said that would have been a “punishing blow” after the Government’s new drink duty was imposed in August – bringing the largest alcohol tax rise for nearly 50 years.

WSTA chief executive Miles Beale said: “The alcohol duty freeze comes as a huge relief to wine and spirit businesses and the hospitality sector, who have taken a battering over the last few years.

“Following the introduction of an entirely new alcohol tax regime and huge hike in August, the latest data shows a worrying decline in sales, which concerns businesses of all sizes and would result in less revenue for the Exchequer. A ­second duty rise would have been disastrous.

“We are pleased the frustrations of consumers, who are fed up with never-ending price rises, and of businesses struggling with the cost and complexities of the new ­system have been heeded.”

Meanwhile, freeports and investment zones will be given 10 years of “financial incentives” instead of a previously planned five.

Mr Hunt also announced a further three investment zones in the West Midlands, East Midlands and Greater Manchester.

He said it would “help catalyse over £3.4billion of private investment and 65,000 new jobs”.

Professor Adrian Pabst, of the National Institute of Economic and Social Research, said the move would help generate “a bit more growth”.

But he added: “The problem is a lack of scale in public investment and a failure to have targeted industrial and skills policy.

“While certain cities and clusters will do better, Levelling Up as it stands will not reduce regional inequalities in a significant, sustained manner.”


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