Trade bodies call for green super-deduction scheme

INTRODUCED FROM 1 April 2021, the super-deduction programme allows companies to claim 130% capital allowances on qualifying plant and machinery investments.

With the scheme soon coming to an end, the trade bodies are calling for a permanent 100% tax deduction for capital spending, to support the transition to net zero and increased productivity. The joint letter highlights the need for such support to be more flexible than the current approach by extending it to leasing and short-term hire. 

Logistics UK is among the signatories to the letter.

Its senior policy manager, Denise Beedell, says: “With the deadline for net-zero by 2050 drawing closer and many logistics businesses operating on tight margins, continued support for investment is vital. Businesses are increasingly assessing their operations to transition to greener technologies and, in addition to increased financial pressures, uncertainty remains regarding the best approach for decarbonisation. With costs rising, purchasing assets outright may not be the most economically viable – especially for those who only need use on a part-time basis. As a result, many businesses are looking to lease or short-term hire, so we are calling on government to maintain its support for investment and introduce a more flexible approach.”

Ms Beedell continues: “Logistics businesses are keen to decarbonise their fleets to meet net zero targets, however, they are already facing a 12.6% rise in vehicle operating costs, a reduction in energy support and a potential 23% increase in fuel duty. The creation of the suggested Green Super-Deduction would provide much needed financial support and encourage greater investment in zero emission technologies.”  

The signatories to the letter are: BVRLA, CECA, EAMA, FLA, Forum of Private Business, Logistics UK, Make UK and MTA.