Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the (a) effectiveness of HMRC's policy on long-life assets and (b) effect of that matter on tug owners.

Capital allowances, including writing down allowances, provide tax relief for businesses' capital expenditure on qualifying plant or machinery.

In 1997 a 6 per cent special rate writing down allowance was introduced for assets with a long life, which is more than 25 years, to align their tax position more closely with the commercial accounts of a business. This compared to a 25 per cent main rate, which is now 18 per cent, for plant and machinery.

HMRC does not classify which assets should be written down at the main or special rate of writing down allowances. Instead, businesses should identify whether an asset they have acquired has a useful economic life of more or less than 25 years when new.

Ships were initially exempted from this change, with owners given 13 years to adjust to the long-life asset rules. Ships are now treated consistently with all other business assets.

The Government keeps all tax reliefs under review.