Budget reactions

6 March 2024

Chancellor Jeremy Hunt’s Budget statement today in the House of Commons suggests that he has to some extent listened to suggestions from industry bodies regarding measures that could help plant and equipment hirers.

As reported previously on the blog, the CPA (Construction Plant-hire Association) had written to the Treasury urging a number of changes, including a commitment to extending to every aspect of the construction plant-hire industry the Full Expensing Allowance that was made permanent last November. And in his statement, the Chancellor said that draft legislation on broadening entitlement will be laid before Parliament. 

Full expensing allows companies to deduct the full costs of plant and machinery immediately from their taxable profits rather than spreading them over multiple years. A business can save up to 25p in tax for every £1 of capital investment. 

CPA President Brian Jones commented: “The announcement by the Chancellor in today’s Spring Budget, that the government will publish draft legislation to extend Full Expensing to assets for leasing when fiscal conditions allow, is a positive step. However, it is vital we know what these fiscal conditions are and when they will be met. 

“We urgently need a timetable of action for this legislation that sets out when CPA members can invest with confidence in new equipment and boost business investment and productivity.” 

Similarly, Nick Ground, Director of the Construction Equipment Association (CEA), said: “It is too early to tell if this is going to be of help to construction equipment purchasers, but it will benefit some of our members who lease equipment for production purposes. The danger is that the promised legislation may remain as a promise as the general election looms.”

The Chancellor also announced that fuel duty will remain at its current rate and be frozen for the next 12 months. The CPA had urged the Treasury to extend this for two years, given increased global uncertainty surrounding the ongoing conflict in the Middle East and the war in Ukraine, but the one-year extension will certainly help the industry.. 

“The announcement to freeze fuel duty will be welcomed,” said CPA’s Brian Jones. “With oil prices volatile, and the wider economic outlook still uncertain, this is a positive move.” 

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