Schedule 21 - First-year allowances for expenditure wholly for a ring fence trade
Finance Bill
5:30 pm
Mr Edward Davey (Kingston and Surbiton, Liberal Democrat)
I support the amendment, and I should be interested to hear whether the Financial Secretary will place on the record the view that the hon. Gentleman said she expressed earlier today—that the capital allowances as currently construed do cover all mothballing expenditure. That is not my understanding. It is important that they should, because when the industry is trying to decide whether it can plan for the future and ensure that certain marginal investments might become profitable later on, if it can mothball various plant and machinery installations it can leave those options open and get better value from that investment, and the resources overall. It is important that the tax regime enables companies to retain their existing facilities if they could have a future use. I hope that the new regime that the Financial Secretary proposes will enable mothballing activity to retain the maximum allowances.