Government ends allowances loophole

Friday August 12th, 2011

The Government has bought forward the closure of a loophole which allowed businesses to accelerate capital allowances claims for plant and machinery and obtain advantageous early tax relief.

Economic Secretary to the Treasury Justine Greening announced the change which will come into effect immediately.

The Minister said that the closure of the loophole has been brought forward because of evidence ‘that not doing so could lead to the loss of significant revenue to the Exchequer’. Legislation will be introduced in the 2012 Finance Bill.

The Economic Secretary to the Treasury, Justine Greening said: “The Government is determined to reduce tax avoidance in order to protect the Exchequer, which provides funding for public services, and maintain fairness for the taxpayer. By ending this loophole today we will preserve important revenue while maintaining a fair system of capital allowances to support business investment.”

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