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Industrial Building Allowances

Volume 33: debated on Tuesday 30 November 1982

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asked the Chancellor of the Exchequer what is the cost to public funds of allowing industrial building allowances to hotels and associated activities at the current rate of 20 per cent.; and if he will estimate the additional cost if this figure were to be raised to 50 per cent. and 75 per cent., respectively.

[pursuant to his reply, 29 November 1982, c. 75.]: The estimated cost of capital allowances to hotels—20 per cent. initial allowance and 4 per cent. annual writing down allowances—is £15 million in the current year. The estimated full year costs of increasing the initial allowance on hotels to 50 per cent. and 75 per cent. are £10 million and £20 million, respectively, on the assumption that sufficient profits are available to absorb the allowances in full.