Following Rishi Sunak’s budget, Rob Oliver CEO, CEA (Construction Equipment Association) comments:
“Whilst the necessary extension of the furlough scheme and additional support for covid-19 challenged business was welcome and expected, there were also some interesting initiatives that may be of direct benefit to the construction sector.
The announcement of a “Super Deduction” for capital investment should stimulate decisions from companies currently undecided about their expenditure plans. For every £100 they spend they will receive a tax credit of £130. The ability to carry back company losses for three years against earlier profits will also help the cash flow of many companies.
“I believe that the “super deduction” is based on a scheme successfully introduced in Slovakia. We look forward to reviewing the details, but on the face of it, it looks like it will be a great time to renew the machine fleets of plant hirers and contractors. These tax concessions are clearly a quid pro quo for swallowing a corporation tax hike in the future”.
The Chancellor has announced the formation of a UK Infrastructure Bank with an initial capitalisation of £12 billion, which he hopes will stimulate investment of £40 billion. The CEA welcomes this as a way of leveraging additional investment in “green” construction projects.
Grants for taking on new apprentices are to be doubled to £3,000 and a “Help to Grow” initiative will offer 90% grants for a new executive development programme. This provides additional incentives for companies to restart their hiring plans and to upskill their existing work force.