IFS Zooms In: The Economy cover image

The Spring Budget Explained

IFS Zooms In: The Economy

CHAPTER

Is There a Difference Between Equity and Debt Finance?

The chancellor will get more money in four or five years time because this is temporary. But the other issue of concern, I think Helen, is that different ways of investing get treated very differently. This gives huge incentives for firms to finance their investments via debt. So you can be in this extremely perverse situation where an investment before tax could be lost making. We want investments that are commercially viable and good productivity not driven by these tax incentives. And we just didn't get that yesterday.

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