MT makes tax plea
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A LESS PAINFUL phasing out of capital allowances for operators has been called for by the Society of Motor Manufacturers and Traders, which is supporting the Road Haulage Association's campaign on the issue.
In its Budget submission, the SMMT puts in a plea for a different approach to the changes in the system of capital allowances for operators.
The object should be to allow vehicles to be written off for tax purposes by their first owners, who would normally keep them for live years, it says.
The new rules started to take effect last April and have meant that unlike befiare — when operators got a 100 per cent first-year capital allowance On new vehicles, and could subtract their whole cost from pre-tax profits, so reducing greatly die amount of Corporation Tax paid — operators can only get a 50 per cent first-year allowance.
And front April 1 this year, the first-year capital allowance is due to disappear altogether. The SMMT says that with any expenditure then only written off at 25 per cent on any year, and on a reducing balance, it will he well over 11 years befbre a vehicle is over 95 per cent written down for tax purposes.
So the SSM'iis joining with the RHA to ask for the
present 50 per cent allowance to be continued until at least 1987, and then to be replaced by a 25 per cent straight He — or each year — depreciation.
The RHA is waiting to meet the Treasury Financial Secretary John Moore to discuss the issue, but no date for the meeting has yet been set.
The SMMT is also asking the Chancellor for excise duties on fuels used in motor industry research and testing to be removed. And it is supporting the Confederation of British Industry's recommendation that l billion a year should be spent on nifrastructure projects.