From 1 April 2023 until the end of March 2026, companies will be able to claim 100% capital allowances on qualifying plant, machinery and IT investments.

Full expensing allows companies to write off the full cost of qualifying plant and machinery investment in the year they invest.

The plant and machinery must be new and unused, must not be a car, given to the company as a gift, or bought to lease to someone else.

In his speech, Jeremy Hunt said: ‘We will introduce a new policy of ‘full expensing’ for the next three years, with an intention to make it permanent as soon as we can responsibly do so.

‘That means that every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.