EY: Yo-Yo tax not a U-turn

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Chris Sanger, Head of Tax Policy at EY, said:

"Today’s announcement of a two year increase in the Annual Investment Allowance, from £25,000 to £250,000 per annum, represents the fourth change in five years.  The last government introduced the allowance at £50,000, increasing it to £100,000 and it was cut by this government to £25,000 from April this year.  Whilst such rapid changes could look incoherent, these incentives are clearly linked to the state of the economy and can accelerate investment.  At a time of economic need, such yo-yo policy changes can nevertheless be rational.

"The Chancellor will be hoping that entrepreneurs are listening to this element of his message and start planning on a spending spree in the New Year, rather than focusing on austerity."