Spring Budget: PwC comments on expansion of full expensing relief for leased and rented assets

Portia Pierrel, Capital Allowances Director at PwC, says:

“Full expensing was announced as a corporation tax relief specifically focused on companies investing in plant and machinery. There has been a long standing exclusion from first year allowances, such as full expensing, being available where assets are being used for leasing. The exclusion has led to a disparity between companies investing in plant and machinery themselves and those who instead choose to lease those assets (as commercially it is more expensive for lessors to provide assets to them).   

“The Government has attempted to address this point through holding discussions on how the full expensing rules might be extended to allow lessors to claim full expensing relief in certain cases. This extension will be a welcome move for those lessors; such as plant hire firms, who play a key role in supplying equipment to a wide range of industries, including construction, infrastructure, manufacturing, amongst others, who may now be able to share in the benefits of full expensing.

“It is not clear yet on the extent and timing of when this will apply, only that  the changes would be made “when fiscal conditions allow” - we wait to see further details in the draft legislation which is expected to be published shortly.”