The new first year allowance has given Britain’s forklifts a dangerous idea: that tax relief is the first rung on the ladder to senior management. Businesses can claim a permanent 40 percent allowance on eligible main rate plant and machinery, helping them deduct much of the cost in the year they invest. One forklift has already deducted its lunch break from the company’s taxable profits and described the result as a bold restructuring.
The relief took effect on 1 January and is intended to support investment in equipment. It is a practical measure for firms buying machinery, particularly those that do not qualify for full expensing. It is not, however, a personal development plan for anything with wheels and a warning light.
That distinction has been lost at the North Midlands Distribution Centre, where Mervyn Gasket, Deputy Controller of Useful Purchases, has been asked to calm an increasingly ambitious pallet truck. “The allowance is designed to encourage productive investment,” he said. “It does not mean the photocopier should start referring to its paper tray as a portfolio.”
The photocopier has since booked a meeting room and printed an agenda headed “From Output to Outlook”. It contains three proposed growth areas, two of which are different fonts. The machine has also begun referring to paper jams as operational adversity.
For businesses, the policy may improve cash flow by bringing tax relief forward. That could make replacing old machinery easier, provided the machinery is actually needed. The Office of Capital Breakfast has nevertheless opened a review into whether the staff room kettle can be classified as strategic infrastructure after boiling water for six consecutive winters.
“I am not just lifting boxes,” announced Sir Liftalot, the warehouse forklift, during a presentation attended by nobody. “I am moving the organisation towards a more agile future.” It then reversed into a shelving unit and blamed the incident on legacy systems, despite being the only legacy system in the aisle.
The allowance does not turn every purchase into a wise one. It changes when eligible investment can receive tax relief. A machine remains a machine, even after an accountant has explained its depreciation schedule. The warehouse has taken the message differently. Sir Liftalot now has a LinkedIn profile describing itself as a tax efficient material handling visionary, while the kettle is preparing a bid to become Chancellor.
By Friday, Sir Liftalot had requested a larger loading bay, a leadership retreat and an assistant with strong people skills. The assistant was a pallet, which has accepted the role after negotiating flexible stacking arrangements. The forklift now wants its own department. The department will be called Leadership, unless the photocopier gets there first and prints the certificate.
Source: HM Treasury.
