United Kingdom


  • Service: Tax
  • Industry: Infrastructure, Building and Construction
  • Type: Press release
  • Date: 26/11/2012

Infrastructure tax breaks “key to growth”, says KPMG survey 

  • Infrastructure key issue ahead of Autumn Statement


  • Tax incentives for capital investment for infrastructure the key growth measure identified by respondents with potential to create tens of thousands of jobs



Tax incentives for capital investment in infrastructure are the key measure identified as a potential driver of growth among Britain’s biggest businesses, according to the latest annual tax competitiveness survey by KPMG in the UK. The findings come ahead of the Autumn Statement on 5 December. 


KPMG polled senior tax professionals in 57 of the UK’s largest businesses.  The findings suggest that such reliefs could unlock tens of thousands of jobs and provide a stimulus for double digit increases in capital expenditure.


The organisations which suggested tax reliefs for infrastructure or capital investment reported that they would increase their headcounts by an average of 6 percent as a result (7 percent among FTSE 100 companies), increase their capital expenditure by 12 percent and their R&D by 17 percent.


Chris Morgan, head of tax policy at KPMG in the UK, said: “When asked what single measure in the UK tax or regulatory regime the government should introduce over the next 12 months, tax relief on infrastructure or capital investments was the stand out leader in terms of what was suggested.  And our survey suggests that such a move would have a real and lasting impact on jobs and capital investment in the country; precisely what is needed to get the growth we so urgently need.  Perhaps the Chancellor might consider a move in this direction in his Autumn Statement on December 5?”


Margaret Stephens, global head of infrastructure tax at KPMG, added: “Investment in infrastructure is a national imperative for the UK, and Government must do all it can to support it.  However, the current tax system actually deters capital investment, for example, in new power stations, waste plants, roads and rail and other capital projects.  UK is the only G20 country which does not give tax relief for this expenditure.”


Key findings


When asked the areas on which the Government should focus to drive growth, the respondents highlighted relief on infrastructure and capital investments, a further reduction in the rate of corporate tax and relief on other investments. In written responses, they also specifically highlighted the need for tax relief for capital investments and an increase in the rate of capital allowances for plant, machinery and infrastructure.


  • More specifically, 21 of the organisations suggest that an increase in the reliefs on capital investment, especially infrastructure, would lead them to increase their headcount by an average of 6%.


  • Of the FTSE 100 companies interviewed, a third said they would increase their headcount by 7% on average if the Government introduced tax reliefs on infrastructure investment. This equates to 4,000 new jobs.


  • If all the suggestions made by the senior tax executives we spoke to were implemented, over 10,000 jobs could be created in the UK and the capital expenditure of each organisation could increase by 12% and spend on R&D by 17%.


  • Some FTSE 100 organisations gave figures which ranged as high as 15%. On the basis of total FTSE 100 headcount of around 2.1 million, this equates to approximately 300,000 jobs across the whole FTSE 100 (on the basis of 2.1million total employment (Source: The One Hundred Club 2011).


Chris Morgan commented: “It’s extremely difficult to quantify what the impact of these measures might be.  However, if we applied the 15 percent highest headcount increase suggested by our FTSE 100 respondents across the 2.1 million people employed by this group as a whole, it would suggest 300,000 extra jobs.  That precise number is likely to be a bit of a stretch but it does seem feasible that a major boost to capital investment on infrastructure could be a fillip to employment and thus be a driver of growth.”


Margaret Stephens: added: “The economic benefit of construction activity would be now, whereas the cash tax impact of a new tax relief for capital expenditure on infrastructure should be years in the future and neutralised by additional tax receipts from growth in the wider economy from the operation of the new infrastructure.”




For further information please contact:


Arti Mohan, KPMG Corporate Communications

Tel:  0207 694 8735 Mobile: 07768 848085: arti.mohan@kpmg.co.uk


KPMG Press Office: 0207 694 8773


Notes to editors


KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff.  The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.



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