When prime minister Rishi Sunak was chancellor, the construction plant-hire sector suffered the double blow of losing its rebate on diesel and missing out on a new capital spending tax allowance. Other industries can deduct the cost of machinery purchases from their tax bill, but not leasing companies.
The Construction Plant-hire Association (CPA) is hoping for more sympathy from Jeremy Hunt.
The CPA wrote to the chancellor last month asking for the fuel tax rebate to be reintroduced for hydrotreated vegetable oil (HVO) for at least two years and for the new full expensing allowance to be extended to the construction plant-hire industry.
CPA chief executive Stu McInroy told the chancellor: “Extending the full expensing allowance to the construction plant-hire sector will have minimal impact on Treasury expenditure. Analysis by the Confederation of British Industry estimates the cost of extending full expensing to the wider leasing industry to be between £170m-£280m – with the actual figure somewhere between the two. Failure to extend the allowance unfairly penalises our members and limits their ability to invest in new greener, cleaner, technologies and equipment. It will also hinder efforts to meet the government’s extended targets for the end of diesel-powered machinery, the effect being totally opposite to that stated government policy.”
The CPA also hopes to see the 2022 cut in fuel duty retained.
“While the industry has adapted and evolved since the removal of the red diesel rebate last year, high fuel prices continue to be an ongoing concern for our members,” Mr McInroy said in his letter. “Progress has been made in the development of future fuels that will ultimately move construction equipment away from its use of diesel, but this process will take time. The government’s recent announcements on changes to the phase out dates for the sale of new petrol and diesel cars from 2030 to 2035, undermines confidence and investment in the wider decarbonisation of other types of machinery that construction plant falls under. This uncertainty damages investment and adds doubt to the government’s plans.”
The autumn statement is scheduled for Wednesday 22nd November 2023.
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