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Rishi Sunak plans massive business tax breaks to spur investment

Move would enable companies to deduct costs of technology, machinery and industrial premises from bills

Rishi Sunak is considering a multi-billion pound tax cut to encourage big companies to invest in machinery and factories as part of his bid to jump-start the economy after the damage wrought by Covid-19.

The Chancellor is understood to be studying plans to give firms a full tax break on capital investment, such as technology, machinery and industrial premises, allowing them to immediately deduct the costs from their bills.

Senior Tories believe such a move could encourage investment among firms otherwise reluctant to do so as a result of the financial hit from coronavirus and rising debt. Mr Sunak is understood to be concerned about current levels of investment by UK firms.

Research in the US has shown that such a tax break, known as “full expensing”, could increase investment by 17.5 per cent and wages by 2.5 per cent. Earlier this year, the Centre for Policy Studies think tank claimed the scheme “would mean businesses investing more, leading to higher incomes and more tax revenue”.

Under the current…

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