A Birmingham accountant and business adviser has mounted a savage attack on the Government's tinkering with capital allowances on plant and machinery.

And Simon Littlejohns, tax partner in PKF's Birmingham office, has called for some "joined up thinking".

He has accused the Government of bringing back essentially what it had already abolished - first year allowances.

An annual investment allowance of 100 per cent of the first £50,000 of expenditure on plant and machinery (excluding cars) was brought in, regardless of business size or form, from 2008 onwards.

This replaced first year allowances available to small and medium businesses.

But then in the latest Budget a 40 per cent rate of First Year Allowances was introduced for expenditure incurred in the 12 months from April 1, 2009.

The capital allowance rules for 2009-10 are such that the 100 per cent Annual Investment Allowance can be claimed up to £50,000 and 40 per cent capital allowance on new asset expenditure above that.

"From a Government that bangs on about stability, this is ridiculous - it just creates more confusion. We are trying to encourage investment, but how can companies make long term investment decisions if they have no idea from one year to the next what incentives will be available," said Mr Littlejohns.

"I have no problem with the Government wanting to stimulate investment in plant and machinery but they could have simply doubled or even trebled the £50,000 figure.

"Why not do that instead of bringing back something they had already abolished. Let's have some joined up thinking for goodness sake."

Mr Littlejohns urged the Government to establish one basic structure within which change could be made, but to not keep changing the structure itself.