§ Mr. Viggersasked the Chancellor of the Exchequer what would be the costs in 1983–84 and the five succeeding full financial years of raising, in the Finance Bill 1983, the present 75 per cent. first-year depreciation allowance for industrial buildings to 100 per cent.
§ Mr. Ridley[pursuant to his reply, 9 December 1982, c. 624]: The cost of increasing these allowances, assuming that the 1982 level of investment continues, is estimated to be:
£ million 1983–84 Negligible 1984–85 55 1985–86 75 1986–87 65 1987–88 50 1988–89 30 Falling to zero in years after 1991–92.
These figures assume that sufficient profits are available to absorb in full the capital allowances that would be due. Because many companies already have unused tax losses, the actual cost of such an increase in allowances is very tentatively estimated to be about £15 million for 1984–85. The figures for later years will depend very much upon the level of profits in those years.
§ Mr. Viggersasked the Chancellor of the Exchequer what would be the costs in 1983–84 and in the five succeeding full financial years of introducing, in the Finance Bill 1983, a 2 per cent. per annum depreciation allowance for new commercial buildings.
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§ Mr. Ridley[pursuant to his reply, 9 December 1982, c. 624]: The estimated costs are as follows:
£ million 1983–84 Negligible 1984–85 20 1985–86 45 1986–87 70 1987–88 100 1988–89 130 The eventual long-term cost is estimated to be £1,500 million a year. These figures are based on present levels of expenditure on new commercial buildings and assume that sufficient profits are available to absorb the allowances in full. Because many companies already have unused tax losses, the actual cost in the period to 1988–89 would be lower. It is not possible to give a reliable estimate of that figure.