Whoop‑doh! The Chancellor is Keeping the Full Expensing Scheme Alive
In a move that made many Brits feel like they finally got a long‑lived holiday bonus, the Chancellor announced early this week that the full expensing capital allowances slated for revival in the Spring Budget will now be permanent. That’s right—say goodbye to the 2026 deadline.
What’s the deal with full expensing?
- Instant tax relief: Companies can write off the cost of plant and machinery straight away, with no waiting game.
- Boost to the bottom line: Lower taxable profits mean less tax to pay—money that can then be reinvested into growth.
- Long‑term confidence: Managers can chart out future infrastructure plans without fearing a sudden tax knock‑on.
Experts Get Their Voice
Martin Dye, Director at Evelyn Partners, shared the buzz:
“The UK’s leading businesses and trade groups have been shouting for this perk to stay on beyond the current three‑year window. It’s not just a nicety—it’s a catalyst for real investment and growth.”
“If firms can plan ahead without the dread of missing a tax‑break window, it gives them the green light to invest in new machinery and machinery‑improving projects. That, in turn, brings new jobs and the kind of economic momentum the Autumn Statement was all about.”
Bottom Line (With a Smile)
So, you can lock down the 2026 glitch in the calendar for good. Full expensing is here to stay, giving businesses the steady hand they need to push forward, open new doors, and bring the UK a bit closer to that elusive gorgeous economic boom.
Full Expensing: The Tax Break That’s Turning Heads
When the government rolled out the full expensing plan in the recent Budget, it felt like a big high‑five from the business world. Why? Because the old super‑detailed capital allowance scheme was about to wane, and at the same time the corporation tax was set to jump to 25% from 1 April 2023. Full expensing gives firms a straight‑away 25% cash tax saving on qualifying plant and machinery – a sweet deal that’s sure to keep money in the investment pot.
Getting the Cost Back Down
A common worry was that full expensing could eat a hefty slice of the Treasury’s coffers – first estimates pegged it at £11 billion a year for the first three years. The problem: while it nudged businesses to spend early, a lot of that “new” capital would have been laid down later on anyway.
Making it permanent changes the game:
- Expected annual cost drops to between £1 billion and £3 billion.
- Business investment could climb by 21% per year by 2030/31 – a staggering £50 billion extra.
- That extra spending could lift GDP by around 2%.
Is the Right Kind of Money Going Where It Should?
Even with the program alive for the long haul, some folks are still scratching their heads about whether it’s steering investment in the smartest places.
For instance, 100% tax relief is handed out for putting up new racking in a warehouse, but then the first‑year allowance drops to 50% for PV panels or work to make lighting and air‑conditioning greener.
What About the Rest of the Population?
One good news is that full expensing is here to stay. But the flip‑side is that the relief is still a private club for companies – individuals and partnerships aren’t getting the same tax break.
So for entrepreneurs it’s a welcome shout‑out, but for the everyday folks it still feels like a missed opportunity.
