Mineral Products Association (MPA) chief executive Jon Prichard said UK Chancellor of the Exchequer Jeremy Hunt offered “relatively little” to Britain’s mineral products industry in his spring budget announcement today in The House of Commons.
However, Prichard noted that some of the MPA’s 520 member companies would welcome full expensing of leased assets.
Full expensing is a capital allowance tax scheme that lets UK companies deduct 100% of the cost of capital equipment from their profits in the year it is bought instead of spreading the cost across multiple tax years. First introduced in the UK Government’s spring budget 2023, the scheme was set to expire on 31 March 2026, but it was made permanent in the Chancellor’s Autumn Statement in November 2023.
“A pre-election Budget aimed squarely at voters offered relatively little for industry. However, full expensing of leased assets is sensible and will be of value to some MPA members,” said Prichard. “We note the date of the CBAM (Carbon Border Adjustment Mechanism) being confirmed as 1st January 2027; given the EU’s equivalent CBAM will come in a whole 12 months earlier, we urge the Government to bring this forward so the British cement industry is not disadvantaged in the interim. With increases to business rates and aggregates levy unchanged from plans, there’s not much to either cheer or to boo.”
In 2021, the UK mineral products industry supplied £22 billion worth of materials and services to the British economy. It is also the largest construction industry supplier, with annual output valued at £178 billion. Industry production represents the largest flow of materials in the UK economy and is also one of the largest manufacturing sectors.
In further industry reaction, Nick Ground, Director of the CEA (Construction Equipment Association), said: “In what was inevitably a challenging budget announcement during an election period, there’s some potentially positive news for construction equipment manufacturers and users.
“After continued representations from the industry, the Chancellor undertook to bring forward changes to the full expensing rules to bring leased equipment into the scheme. Whilst in an ideal world ‘leasing’ may also cover equipment bought for rental purposes, the published supporting information is unclear regarding the timing and detailed content of the necessary legislation.
“It is too early to tell if this is going to be of help to construction equipment purchasers, but it will benefit some of our members who lease equipment for production purposes. The danger is that the promised legislation may remain as a promise as the general election looms.
“What can be welcomed is the fuel duty freeze after the unwelcome extra costs associated with the banning of rebated red diesel for construction purposes in 2022.
“The much-trailed reduction in employees’ national insurance will be a boost for working families’ household budgets and may reduce some of the pressure on employers for wage increases. Employer’s national insurance contributions remain untouched and are still a significant tax on employment.”
The UK Chancellor’s key spring budget measures were a further 2p National Insurance cut from April 2024, the high-income child benefit threshold raised to £60,000, the abolishment of non-dom status, a 5p fuel duty cut to continue for another 12 months, alcohol duty freeze extended to February 2025, a new British ISA to be introduced, almost £6 billion in additional funding for the NHS, an announcement of excise duty on vaping products, stamp duty relief on several homes in one sale scrapped, and a reduction in capital gains tax rate from 28% to 24%.
