Law firms are likely to miss out on an investment incentive scheme that began this month, unless the government takes action.
The full expensing policy, announced in the Chancellor’s budget and due to run from April 2023 to March 2026, enables businesses to claim 100% capital allowances on investment in plant and machinery in the same tax year.
However, Law Society president Lubna Shuja warned: ‘Many law firms operate under the partnership model and as such partners are taxed individually.
‘This means they do not pay corporation tax and so cannot access the scheme. This creates an odd situation where an insurance company could invest in IT and receive the allowance, but a law firm next door would be unable to.’
Shuja called on the government to extend full expensing to cover law firms.
