TAX INCENTIVES for investment in infrastructure are “key” to driving growth among Britain’s biggest businesses, according to the latest annual tax competitiveness survey by KPMG.
The Big Four firm polled senior tax professionals in 57 of the UK’s largest businesses, with findings suggesting such reliefs could free up tens of thousands of jobs and stimulate capital expenditure.
Organisations which suggested tax reliefs for infrastructure or capital investment reported they would increase their headcounts by an average of 6%, in turn upping their capital expenditure by 12% and their research and development by 17%.
Of FTSE 100 companies interviewed, a third said they would increase their headcount by 7% on average – equating to 4,000 jobs – if the government introduced tax reliefs on infrastructure investment.
Global head of infrastructure tax at KPMG Margaret Stephens described investment in infrastructure as “a national imperative for the UK”.
She added: “[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. The UK is the only G20 country which does not give tax relief for this expenditure.”
Chancellor George Osborne is due to make his Autumn Statement on 5 December, with KPMG’s head of tax policy Chris Morgan suggesting “a move in this direction” may be considered.
“Such a move would have a real and lasting impact on jobs and capital investment in the country,” he said.
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The ACCA has announced a partnership with UK research and development tax reclaim specialist RD Tax Solutions
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The chancellor has “missed an opportunity” to restore business confidence and encourage UK investment, said Mazars