BT shares soar following budget super deduction

BT shares soar following budget super deduction

BT Tower generic 16.9.jpg

BT Group shares saw a sharp rise following the 2021 Budget announcement from UK chancellor Rishi Sunak.

Included in Sunak’s annual budget for public spending, was a new super deduction policy that will allow companies to cut their tax bill if they increase investment.

Specifically, the policy states that “companies investing in qualifying new plant and machinery assets will be able to claim:

  • a 130% super-deduction capital allowance on qualifying plant and machinery investments

  • a 50% first-year allowance for qualifying special rate assets

Overall, this means that UK companies will be able to cut their tax bill by up to 25p for every £1 they invest.

This is great news for BT, namely its infrastructure unit, Openreach, which is currently investing approximately £12 billion to rollout full fibre to 20 million homes between 2020 and 2025.

As a result, the company’s shares rose 7% to 134.48p as of roughly 3pm on Wednesday 3 March 2021.

In a statement, Neil Wilson, chief market analyst at, said: “BT has emerged as one of the big winners from the budget as the super deduction tax relief will allow it to offset its fibre infrastructure spending. Any capital-intensive projects should be winners.”

Earlier this week, Jan du Plessis, BT Group chairman announced his retirement from the role saying, “I know the time is now right for me to step down and focus on other interests”.

BT’s board has begun the process of finding du Plessis’ successor, a search that will be led by senior independent director, Iain Conn.

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