Tax incentives for capital investment can boost growth

Tuesday 27 November 2012

Tax incentives

Tax incentives for capital investment in infrastructure can help large UK businesses grow their operations, it has been claimed.

Business leaders surveyed by KPMG said reliefs could unlock tens of thousands of jobs and provide a stimulus for double-digit increases in capital expenditure.

Those in favour of tax reliefs for infrastructure or investment said they would increase their headcounts by an average of six per cent, capital expenditure by 12 per cent and research and development by 17 per cent.

Chris Morgan, head of tax policy at KPMG in the UK, said that when asked which single measure in the UK tax or regulatory regime the government should introduce over the next 12 months, tax relief on infrastructure or capital investments was "the stand out leader" in terms of what was suggested.

"Our survey suggests that such a move would have a real and lasting impact on jobs and capital investment in the country; precisely what is needed to get the growth we so urgently need," he stated.

Margaret Stephens, global head of infrastructure tax at KPMG, said investment in infrastructure is "a national imperative" for the UK, and the government must do all it can to support it.

"However, the current tax system actually deters capital investment, for example, in new power stations, waste plants, roads and rail and other capital projects," she stated.

"UK is the only G20 country which does not give tax relief for this expenditure."

Posted by Steve Williams