Back to News & Insights
/ Tax

Dear Government – the theory of unintended consequences!

Everybody focuses on the big tax headline which means everybody overlooks the small print and the little hidden tax increases. How many of you remember that in June 2010 the Chancellor reduced the Annual Investment Allowance from £100,000 to £25,000. What does this mean? If a business wants to invest in commercial vehicles, plant, computers or other equipment it receives 100% tax relief on the amount invested. This is a big help for businesses but from April 2012 this help is going to be reduced as the maximum level of investment which will attract relief will go down by 75% from £100,000 to £25,000.

In other words rather than encouraging businesses to invest the government is putting in hidden obstacles. How does this sit with the “commitment to growth”? Words like spin, deception, incompetence spring to mind.