Budget changes ‘offer opportunity to farmers to invest in their businesses’
PUBLISHED: 09:13 01 November 2018 | UPDATED: 10:40 01 November 2018
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Autumn budget changes to capital allowances gives farmers and landowners “a good opportunity” to invest in their businesses, land agents say.
The Central Association of Agricultural Valuers (CAAV) said chancellor Philip Hammond’s speech on October 29 had offered “some new powerful supportive tools” to enable them to face the challenges ahead.
Eleanor Havers, president of Suffolk Agricultural Valuers Association, said most landowners and farmers would breathe a sigh of relief that there was “nothing too drastic” in the speech.
“There was no changes to Agricultural Property Relief (APR) or Business Property Relief (BPR) although the qualifying period for owning an asset for Entrepreneurs Relief has increased from 12 months to two years,” she said.
“Of greater interest is the welcome opportunity for investment following an increase in relief for Agricultural Building Allowance to 2% per annum capital allowance, covering the construction of any building intended for commercial use or any works – including demolition - to improve or convert existing structures; useful preparation for the post-Brexit world.”
She added that businesses should be aware that making tax digital is here to stay and all records must be kept digitally and sent directly to HMRC.
CAAV secretary Jeremy Moody said with the planned removal of the Basic Payment Scheme (BPS), there was a ‘time window’ to manage change and build businesses. “These changes will help farmers prepare for the post-Brexit world,” he said.
A new capital allowance for non-residential buildings would be “especially useful” for agricultural businesses which typically depend on buildings, many of which are now aged, he said. “This gives new assistance for the capital investments many will need.”
The new structures and buildings allowance means any new projects that have not had contracts entered into before October 29, 2018, will be eligible for a 2% a year capital allowance. It covers the construction of any building intended for commercial use or any works to improve or convert existing structures.“This new buildings allowance is extremely welcome as agriculture relies heavily on renewing fixed structures,” he said.