The IPCA is seeking urgent talks and consultation with the Irish Government about the implementation of a Super-Deduction stimulus scheme.
Super-Deduction is a tax relief scheme that enables business who purchase qualifying construction equipment or machinery to benefit from a year one capital allowance.
The scheme has seen recent prominence and attention with the announcement and introduction by British Chancellor Rishi Sunak in his March 3rd budget.
The initiative which came into effective in the UK on April 1st 2021 has been seen as a strong industry stimulus and has been broadly welcomed by business, trade associations and trade unions.
Quite simply, the stimulus initiative has one objective and that is to drive investment in plant and machinery, by offering a more attractive tax relief programme than was previously available.
The scheme allows businesses to offset 130% of the investment spent on plant and machinery against profits for the next two years. So if you invest €10m on new equipment you reduce your taxable income by €13m.
With the Irish construction market more impacted than anticipated and only now slowly reopening, a similar scheme, launched in Ireland, would in the view of the IPCA be the ideal initiative as part of a package of proposals to support the recovery in the sector.
The IPCA was launched on a platform of fairness for all, we are strong advocates therefore for the launch of a super-deduction scheme in Ireland. The association believes this will help level the playing field across the island of Ireland and grow the market for the good of Irish construction.
Pat O’Donnell, Managing Director, Pat O’Donnell & Co., commented ‘A super WDA for Construction Equipment purchasers would stimulate business investment by increasing the incentive to invest in plant and machinery by offering higher rates of relief than previously available. By investing in newer Construction Plant Machines, companies can take advantages of the advances in research and technology. Our suppliers, Volvo Construction Equipment, Sennebogen, Volvo Penta, Rammer and Avant, invest hugely in research and product development and their latest ranges of machines offer companies more productive, more efficient, safer machines which also offer greater fuel savings than ever before. When the country emerges from this pandemic it will need to re-stimulate the economy and re-start projects which have stalled, more efficient, greener machines can help get things moving and play their part in achieving Ireland’s environmental targets.”
“As members of the Irish Plant Contractors Association we endorse this initiative and believe it would be a huge benefit to construction. Firms will have more finance to invest in employees and will assist in the purchasing of more modern equipment which in turn will enable firms to reduce carbon emissions by using the latest products from manufacturers.” John Duffy MD JJ Duffy Demolition
“The super deduction proposed by the IPCA would be a hugely welcomed initiative to support a range of Irish businesses in particular the construction sectors where this a high demand for capital intensive equipment. The deduction would provide Irish Companies with the impetus to refocus on business growth and encourage them to invest in productivity- enhancing plant and machinery assets that will help them grow further out of Covid and the ongoing challenges it brings to Irish Businesses. The initiative would also allow companies to avail of newer more technologically advanced equipment and machinery that improve, not just cost efficiency, but even more importantly, that are more fuel efficient and reduce overall carbon emissions, which is a key focus for Capitalflow, as we work to become carbon neutral as a company.”
Ronan Kelly, Managing Director, Capitalflow