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The Annual Investment Allowance is the amount a business can spend on capital equipment like computers without having to learn a whole set of tax rules about writing down allowances.
So carrying on being able to spend up to £250,000 a year sounds like a good thing, and doubling that to half a million pounds sounds even better, right?
Except doubling the allowance will give away about £665 million next year and £1270 million in 2016-17. But of course that's just a timing change -- the businesses would have been able to set some of the cost of their shiny new equipment off against tax anyway... over about 20 years!
What it will do, though, is give businesses a kick up the backside to get them spending the money now, now, now, while they can still get the tax break – which will be excellent news for the manufacturers and sellers of plant and machinery, just in time for the election.
Governments are perfectly entitled to make this sort of decision, of course – that's what we pay them for. Maybe bumping up sales of equipment will bumpstart the economy and create some jobs and create a virtuous circle. I hope so.
But when they make these decisions on our behalf, the government are supposed to take a few things into account. Like equality, for example. They can decide that the bump-start effect is more important than equality, but they have to think it through and make a conscious decision that the needs of the few outweigh the needs of the many.
What they aren't entitled to do, so far as I'm aware, is to say that the measure does not impact on the equality of groups with protected characteristics (as they do in the impact assessment here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil... ) when they know perfectly well that the majority of women-led businesses and of bame-led businesses are SMEs – small and medium enterprises which are unlikely ever to turnover half a million, let alone to be able to spend that on equipment. (See for example: https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil... )
They are also supposed to take into account any impact on smaller businesses – where "smaller" means "with fewer than 50 employees", which could include some businesses that you or I might think quite large. But it's OK, the government has at least thought this one through:
Small and micro business assessment: the temporary increase in the AIA is not expected to have any material impact on small firms (those with up to 49 employees).
Well that's six hundred million quid well spent, then…
* Ekklesia's 2014 Budget coverage: http://www.ekklesia.co.uk/budget2014
* On Twitter, follow the hashtag: #Budget2014
© Wendy Bradley is a PhD student at Sheffield University, working on the relationship between tax simplification and better regulation. She is a member of the Women's Budget Group and also blogs at http://tiintax.com. Twitter: @wendybradley Ekklesia blog: http://www.ekklesia.co.uk/wendybradleyTweet