§ Mr. SheermanTo ask the Chancellor of the Exchequer for which periods in the last 30 years 100 per cent. capital allowances for investment in machinery and plant have been available. [35070]
1249W
§ Mr. JackOne hundred per cent. capital allowances were available for expenditure on machinery and plant incurred between 22 March 1972 and 13 March 1984.
One hundred per cent. capital allowances were also available between 27 October 1970 and 21 March 1972 for expenditure on the provision of a new ship or on new non-mobile machinery or plant for use for industrial purposes in a development area or Northern Ireland. The requirement that the machinery or plant had to be used for industrial purposes was removed between 20 July 1971 and 21 March 1972.
One hundred per cent. first year capital allowances were phased out as part of the Government's 1984 business tax reforms. The purpose of these reforms was to create a more neutral tax regime based on significantly lower rates of tax, with allowances for depreciation more closely reflecting useful asset life.
As a result of these reforms, the main rate of corporation tax has been reduced from 45 per cent. to 33 per cent. and the small companies rate is down from 30 per cent. to 25 per cent. since 1984.