The CBI is calling for a permanent investment deduction to stop the damage that might do to our growth prospects – but what is it?

For two years, the Super-deduction has worked to incentivise business investment post pandemic by enabling firms to reduce their taxable profits based on qualifying spend. But it was only ever intended to be temporary, and it’s coming to an end this month – just when the UK government is hiking Corporation Tax by six points. Combine that with all the other cost pressures they’re facing, and the double whammy will hit firms’ confidence hard. Long-term investment decisions will falter.
With the Super-deduction in play, the UK has the fifth most competitive capital investment incentives in the OECD. A CBI survey showed a fifth of business investment planned while it was in place would not have happened without it – with another fifth brought forward to benefit from it. And these capital investments make our firms more effective, efficient and productive.
Without the Super-deduction, we could slip back to 30th out of the 38 countries in the