Mon 16th Mar 2015
NI Chamber urges Chancellor to introduce long-term Annual Investment Allowance
- Chancellor must not add to the uncertainty by proposing a series of short-term measures that could be reversed after the General Election
- Focal point for Budget 2015 must be on measures to support long-term business investment
- Introduction of a long-term Annual Investment Allowance would enable companies to invest in plant, machinery and premises improvement whilst waiting on the devolution of Corporation Tax
Northern Ireland Chamber of Commerce and Industry (NI Chamber) is calling on the Chancellor to deliver a ‘Budget for business’ on 18 March 2015.
Kevin Kingston, President of NI Chamber, has urged the Government to sign off a Budget that boosts business confidence and creates an environment for investment and growth. Mr Kingston said:
“Northern Ireland Chamber of Commerce and Industry (NI Chamber) welcomes the improvement in economic growth in 2014 and that the UK is currently the fastest-growing economy in the G7. Furthermore our own Quarterly Economic Survey – a leading indicator of Northern Ireland’s economic performance – confirms that although Northern Ireland still lags behind the UK with regards to a recovery, Northern Ireland businesses are well placed to grow this year.
“However an economic recovery still faces several obstacles, intensified by the uncertainty of the upcoming general election. Business optimism may not last if short-term political point scoring is put ahead of securing our long-term economic future.
“NI Chamber believes that the focal point for Budget 2015 must be on measures to support long-term business investment. Despite the pick-up in economic activity, the UK economy remains far too reliant on consumer spending, which currently accounts for almost two-thirds of UK GDP, to support growth. The 1.4% fall in business investment in Q3 2014, the steepest decline since the depths of the last recession, is a timely reminder that more needs to be done to promote business investment and achieve better-balanced growth.
“We do not wish to add to the uncertainty by proposing a series of short-term measures that could be reversed after the General Election. Therefore we propose, along with our colleagues at the British Chambers of Commerce, one key measure for 2015 – introduce a long-term Annual Investment Allowance level at £500,000 that enables companies to invest in plant, machinery and crucially premises improvement.
“Last year’s budget extended the Annual Investment Allowance (AIA) and doubled the amount covered. However this extension is due to run out at the end of the year and we now urge government to go one further and introduce a long-term AIA level at £500,000 and widen its scope to include premises improvements as well.
“This will be a crucial tool for our members which will encourage them to push ahead with investments. It will also allow them to invest with confidence as businesses need long-term certainty to help support investment decisions, rather than short-term incentives.
“NI Chamber also makes a strong plea to the Chancellor that any of the business measures introduced in Budget 2015 are fit for purpose for Northern Ireland. Funding available from the Annual Investment Allowance is one such measure that is fit for purpose in Northern Ireland and one that will help businesses invest whilst they wait for a reduction in Northern Ireland’s Corporation Tax rate.”