Originally the tax break for investments in IT equipment, plant and machinery was in place for only three years, which created uncertainty for businesses.

Jeremy Hunt has now removed the expiry date and said that ‘businesses will benefit from the biggest business tax cut in modern British history’.

The Treasury also announced plans to permanently simplify capital allowances and will launch a technical consultation on wider changes to simplify the UK’s capital allowances legislation. It is also considering extending full expensing to asset leasing.

Full expensing offers effective permanent tax cut of £11bn a year, boosting business investment by £14bn across the forecast period and helping to grow the economy.