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FLA calls for capital allowance extension

Apr 09 2009

Capital allowances for small and medium-sized enterprises (SMEs) should be extended, according to the Finance & Leasing Association (FLA).

The organisation's Budget submission calls on the government to increase the scope of its Enhanced Capital Allowances Scheme, so that small firms can offset more business equipment spending against their taxable profits.

Currently, the scheme only allows up to £50,000 to be immediately offset, but the group recommends this cap is removed for a trial period to allow small companies to benefit from new equipment such as plant and machinery, office technology and commercial vehicles.

Stephen Sklaroff, director general of the FLA, comments: 'This further proposal would ensure that business investment was more affordable for more businesses and would be a win both for the Exchequer and for SMEs.'

Director of technical policy at the Association of Chartered Certified Accountants Steve Priddy adds that small firms are central to the UK's economic recovery and says allowing them tax breaks is sensible in the current business climate.

Earlier this month, the Forum of Private Business called for a freeze in fuel duty rises, claiming that there is 'no justifiable reason' to increase the charges facing small businesses.

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