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What does the Government’s extension of the £1 million tax break mean for UK manufacturing?

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The Government have announced an extension of the £1 million tax break for businesses to stimulate investment. Find out what this means for the UK manufacturing industry. Ken McKeating, Paragon’s Sales Director for SME Lending, shares his thoughts on what this means for the sector. 

“Towards the end of 2020, it was announced that there would be an extension to the £1 million tax break, until January 1 2022. The tax break was announced in a bid to stimulate investment in UK manufacturing, to support business confidence. 

Businesses, including manufacturing firms, can continue to claim up to £1 million in same-year tax relief through the Annual Investment Allowance (AIA) for capital investments in plant and machinery assets until the deadline in January 2022, when the cap will revert to £200,000. 

This extension is expected to support businesses through the ongoing pandemic and help them to plan for the future. 

 It’s vital that businesses are supported through these uncertain times. Extending the AIA’s £1 million cap will encourage businesses to invest despite the ongoing pandemic and support them to grow, whilst benefiting the wider UK economy.  

Whilst this was a promising announcement for the sector, it’s also important that businesses do not let tax incentives drive spending decisions.” 

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