Irish equipment distributor McHale Plant Sales has called for the country to consider new tax reliefs on investments in plant and machinery similar to those recently introduced by UK Chancellor of the Exchequer Rishi Sunak.
The appeal was made in a letter from the company to Finance Minister Pascal Donoghue. McHale, based in Birdhill and Rathcoole, represents quarrying and construction equipment manufacturers Komatsu, Metso Outotec, Terex Ecotec and Merlo in Ireland.
The new UK regulations, operative from April, include a provision that companies investing in qualifying new plant and machinery assets can benefit from a new temporary tax arrangement that delivers a 130% first-year capital allowance. McHale says this is greater in many cases than the purchase price of the machinery itself.
Designed to stimulate business investment, the measure increases the incentive to invest in plant and machinery by offering higher rates of relief than were previously available.
UK HM Revenue & Customs says the measure is expected to bring economic benefits. In explanatory information accompanying its introduction, it states that the new arrangement “will have a positive impact on business investment…by reducing the tax-adjusted cost of capital for millions of companies, large and small, investing in qualifying plant and machinery assets”.
In the letter to Minister Donoghue, McHale Plant Sales finance director Liam Foley expressed his company’s support for the measure, and encouraged the Irish Government to introduce a similar provision “in its next Budget or at such earlier opportunity as may present”.
“In circumstances whereby Covid-19 has brought about a halt to major infrastructural development and a virtual closure of the house building and construction sectors – with all of the consequential losses this has brought to companies operating in the plant and machinery business – the introduction here of an equally attractive provision would be one that would bring great benefit and stimulate employment in the sector,” Foley said.
“Moreover, it would level the playing field between here and Northern Ireland and remove any cross-border sales and marketing imbalances that might arise and could impact negatively on locally-based distributors.”
