Infrastructure tax breaks are a key to growth says KPMG survey

Tax incentives for capital investment in infrastructure are the key measure identified as a potential driver of growth among Britain’s biggest businesses, according to the latest annual tax competitiveness survey by KPMG in the UK. The findings come ahead of the Autumn Statement on 5 December. 

KPMG polled senior tax professionals in 57 of the UK’s largest businesses.  The findings suggest that such reliefs could unlock tens of thousands of jobs and provide a stimulus for double digit increases in capital expenditure.

The organisations which suggested tax reliefs for infrastructure or capital investment reported that they would increase their headcounts by an average of 6 percent as a result (7 percent among FTSE 100 companies), increase their capital expenditure by 12 percent and their R&D by 17 percent.

Chris Morgan, head of tax policy at KPMG in the UK, said: “When asked what single measure in the UK tax or regulatory regime the government should introduce over the next 12 months, tax relief on infrastructure or capital investments was the stand out leader in terms of what was suggested.  And our survey suggests that such a move would have a real and lasting impact on jobs and capital investment in the country; precisely what is needed to get the growth we so urgently need.  Perhaps the Chancellor might consider a move in this direction in his Autumn Statement on December 5?”

Margaret Stephens, global head of infrastructure tax at KPMG, added: “Investment in infrastructure is a national imperative for the UK, and Government must do all it can to support it.  However, the current tax system actually deters capital investment, for example, in new power stations, waste plants, roads and rail and other capital projects.  UK is the only G20 country which does not give tax relief for this expenditure.”

Full article at KPMG