Tax incentives for capital investment in infrastructure could help Britain’s biggest companies to grow.
According to KPMG’s annual tax competitiveness survey, such reliefs could create tens of thousands of jobs and provide a stimulus for double-digit increases in capital expenditure.
Organisations that proposed tax reliefs for infrastructure or capital investment reported that they would increase their headcounts by an average of 6% as a result (7% among FTSE 100 companies).
The also said that they would increase their capital expenditure by an average of 12% and their research and development by 17%.
Margaret Stephens, global head of infrastructure tax at KPMG, said: “Investment in infrastructure is a national imperative for the UK, and the government must do all it can to support it. But 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 that does not give tax relief for this expenditure.”
Sally Percy is editor of The Treasurer