Affordable leasing and short-term hire options are essential for logistics businesses to acquire the vital plant and machinery they need for their operations, according to Logistics UK, one of the UK’s biggest business groups.
Logistics UK joined six other groups in writing to the Chancellor of the Exchequer, Rishi Sunak MP, to urge him to extend the eligibility criteria for the super-deduction allowance (SDA) to include leasing and short-term hire – two of the most common ways that businesses acquire new plant and machinery.
From 1 April 2021 to 31 March 2023, the SDA enables companies to claim 130% capital allowances on qualifying plant and machinery investments, in effect, cutting a companies’ tax bill by 25p for every pound they invest in new equipment.
While the measure was designed to benefit businesses financially and operationally, the legislation excluded leasing and short-term hire, which are some of the most common ways plant and machinery are acquired by businesses, as Denise Beedell, Public Policy Manager at Logistics UK comments:
“Logistics UK is pleased to join with other trade associations in calling on the Chancellor to extend the eligibility criteria for the SDA to include leasing and short-term hire. The logistics industry has risen to the challenge of keeping the supply chain going in the face of unprecedented obstacles and rising costs; including leasing and short-term hire would provide much needed support to this vital sector now also working to meet the even more testing challenge of the transition to net zero.”
Stephen Haddrill, Director General of the Finance & Leasing Association, comments: “The era of buying plant and machinery outright is long gone. It’s so much more efficient for firms to lease or hire-in what they need when they need it, but the super deduction allowance simply does not support the realities of how modern businesses operate. The Chancellor has a real opportunity here to nurture productivity by getting the newest, cleanest and most efficient plant and machinery into the hands of business owners.”
Along with the six other business groups – British Vehicle Rental and Leasing Association, Civil Engineering Contractors Association, Forum of Private Business, Finance & Leasing Association, Manufacturing Technologies Association and Association of Chartered Certified Accountants – Logistics UK is inviting officials to a roundtable discussion in September 2021 to discuss the essential role leasing and short-term hire play in enabling business investment in equipment.