Osborne doubles annual investment fund for companies to £500,000 until end of 2015
THE MAJOR change for business investment in the Budget comes from a doubling of the investment allowance, which rises to £500,000 from next month.
The annual investment allowance has been on a roller coaster ride in the past four years. In its 2010 Budget, the previous government raised it from £50,000 to £100,000. By the 2011 Budget, George Osborne cut the rate back to £25,000.
In the Autumn Statement in 2012, the investment threshold was raised to £250,000 for a temporary period of two years. But the threshold will now be doubled to £500,000 until the end of 2015.
John Cridland, director general of the Confederation of British Industry (CBI), said: “The doubling and extension of the annual investment allowance, together with making the seed enterprise investment scheme permanent, will be a shot in the arm for many medium-sized businesses.”
The government estimates that the change will lose the Treasury about £85m in the 2014-15 financial year, £665m the year afterwards, and £1.27bn in 2016-17.