BRIT companies will get 30% tax back as Rishi Sunak today announced a ‘Super Deduction’ for businesses who invest in new equipment.
The Chancellor today described the move as a “bold, unprecedented action” to invest in and create jobs after the UK was hit by the Covid crisis.
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Mr Sunak said the move would be a “super deduction” for companies when they invest, reducing their tax bill by 130% of the cost.
Speaking in the Commons today, the Chancellor said: “Today I can announce the ‘Super Deduction’.
“For the next two years, when companies invest, they can reduce their tax bill, not just by a proportion of the cost of that investment, as they do now, or even by 100% of the cost.
“With the Super Deduction they can now reduce their tax bill by 130% of the cost.”
He said that under the existing rules, a construction firm buying £10m of new equipment could reduce their taxable income, in the year they invest, by £2.6m.
However, under the new scheme, the company would be able to reduce their taxable income by £13 million.
He added: “We’ve never tried this before in our country.”
Meanwhile, Mr Sunak, delivering only his second Budget since becoming Chancellor last year, confirmed he would extend a range of support measures including the VAT help, furlough, stamp duty cuts and more to get the nation through the worst of the pandemic.
The Chancellor promised to help struggling Brits with “more support to get people through to the other side of the crisis”.
He told the nation today: “Much has changed. But one thing has stayed the same. I said I would do whatever it takes; I have done; and I will do.”
He confirmed today:
Earlier today the Chancellor addressed Cabinet alongside the PM, saying that “the coronavirus pandemic has hit our economy hard”.
But he admitted that he was “optimistic about our recovery” and promised that the Budget today would “begin the work of building our future economy”.
Yet he stressed the nation must not forget how much cash has been borrowed “on an extraordinary scale – equivalent only to wartime levels”.
He insisted: “As a Conservative Government, we know that we cannot ignore this problem and it wouldn’t be right or responsible to do so.
“We will rise to that challenge”.