Sunak mulls tax breaks for businesses

Edward Malnick in the Sunday Telegraph reports that Chancellor Rishi Sunak is considering tax cuts designed to encourage big companies to invest in machinery and factories in a move the Treasury hopes would boost the economy. The mooted plan would see firms given a full tax break on capital investment, allowing them to deduct the costs from their bills immediately. Currently, companies are given tax relief on the first £200,000 of investment, with a temporary two-year increase to £1m expiring in January. Research in the US shows that full tax breaks can push investment up by 17.5% and increase wages by 2.5%. A Centre for Policy Studies report earlier this year said such an initiative "would mean businesses investing more, leading to higher incomes and more tax revenue". Mr Malnick says the Chancellor could introduce full expensing for a temporary period as part of measures to jump-start the economy after the coronavirus pandemic hit the nation’s coffers.