The Government should introduce a permanent tax relief to encourage more investment by businesses, the British Beer and Pub Association (BBPA) has said.
Responding to the Government’s consultation on capital allowances, which closes today (1 July), the BBPA supported calls by other leading trade bodies such as the Confederation of British Industry (CBI) to introduce a permanent 100% deduction for investment in capital allowance.
The call follows data released this week revealing only 28% of hospitality businesses are currently considering any sort of investment due to the challenging economic climate.
The tax relief would replace the current super deduction and introduce a system of ‘full expensing’ allowing businesses to immediately deduct qualifying investments from their taxes, rather than spreading the deduction over time.
It is estimated such a system could also unlock the UK’s international investment potential, moving from bottom of the G7 ranking for business investment to fifth by 2026.
In addition, the trade association noted that any adjustment to capital allowance tax should sit alongside a review to planning processes; with long application and approval processes currently acting as a major blocker to many pub companies investing in their estates.
Commenting on the recommendation Chief Executive of the British Beer and Pub Association Emma McClarkin said:
“We find ourselves in a position as a sector where we are keen to get back to business, provide the best service and experiences for our customers and thrive at the heart of communities across the country, but we are being held back by a lack of incentives to invest.
“Our pubs and breweries need to feel confident to spend their money, especially after the past two years, and a permanent deduction would go some way to providing assurance and allow them to make investments to upgrade their venues, take on new properties and ultimately grow their businesses.”