Diversified farms could get a “sizeable” tax break from the latest budget according to accountants.
Old Mill rural tax adviser, Catherine Vickery, said the reduction in business rates for on-farm business properties of £51,000 or less, could see a cut of one third on their current rates for the next two years.
“If you’ve a farm shop, furnished holiday lets, a solar park or a number of other diversified activities, you may well benefit from this reduction,” said Vickery.
She said there were a number of potential benefits for agriculture from chancellor Philip Hammond’s latest financial schedule, including a new Structures and Buildings Allowance, which has been praised by the NFU for providing a tax break on farm infrastructure.
“The SBA gives a 2 per cent capital allowance every year on any new buildings that have not yet been started or if contracts have not yet been signed. This extra allowance might be really useful for anyone considering putting up new farm buildings.”
The raising of the Annual Investment Allowance from £200,000 to £1 million for the next two years will also make a “substantial difference” according to Vickery for farmers or big contractors who need to invest or buy a lot of kit.
She added: “Care does need to be taken with regards to timing as the year end of the business will impact on when a claim on a substantial purchase can be maximised. Unfortunately it is not as simple as purchasing after 1 January 2019, so it is crucial to take advice before committing.”
Further potential benefits from the budget include the fuel duty freeze, the increase in the personal allowance to £12,500 and higher rate tax threshold to £50,000, and the reduction in the employer apprenticeship contributions from 10 to five per cent for small businesses.
One thing for labour intensive growers to keep their eye on is the rise in National Living Wage from £7.83 to £8.21 per hour, coming into effect in April 2019.
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