UK plans 11 billion sterling business tax break in budget - Bloomberg News

Sat, Mar 11, 2023, 

FILE PHOTO: FILE PHOTO: British Chancellor of the Exchequer Jeremy Hunt talks to a television crew outside the BBC headquarters in London

(Reuters) - British finance minister Jeremy Hunt will hand businesses a three-year tax break worth 11 billion pounds ($13.23 billion) by replacing the UK's investment allowance with a temporary measure in next week's budget, Bloomberg News reported on Saturday, citing a government official with knowledge of the matter.

Hunt will limit the relief to three years and propose a permanent replacement in the ruling Conservative Party's manifesto before the next election, the report said.

Under this replacement full-expensing regime, companies will continue to save 25 pence on their tax bill for every 1 pound invested, the report said. A previously announced increase in the headline rate of corporation tax, to 25% from 19%, is due to come into force in April.

"For the manufacturing industry... those capital allowances work, so I would say, we do want to bring down our effective corporation tax, the total amount people pay," Hunt said earlier today in a GB News interview, referring to measures which allow companies to offset capital expenditure against their tax bill.

Hunt is due to present his budget on Wednesday.

($1 = 0.8314 pounds)

(Reporting by Lavanya Ahire in Bengaluru; Editing by Tomasz Janowski and Mike Harrison)