THERE was a cautious reaction from NFU Scotland yesterday to Chancellor George Osborne’s Autumn Statement, with a spokesman welcoming the increase in investment allowances but adding the devil might be in the still-to-be-published tax proposals.
“Those farmers needing to invest in their plant and machinery will welcome the ten-fold increase in the annual investment allowance, which goes up from £25,000 to £250,000,” the union said.
“Although time-limited to two years, starting from 1 January, 2013, this was a lobbying point for the farming unions. Given the difficult year that most Scottish farm businesses have faced, many may not be in a position to make use of this immediately but a better 2013 may mean it will be of benefit to farm businesses the following year.“
The union indicated that another of its targets; the lifting of investment allowances for farm buildings and infrastructure, would have been an equally welcome boost to the rural economy but this did not emerge.
“More cuts to the main rate of corporate tax will help an estimated 5 per cent of farm businesses but not the 95 per cent who work as sole traders or partnerships.”
Once again the cost of fuel raised hackles. While welcoming the scrapping of the 3p rise in fuel duty planned for the New Year, the union was adamant the cost of transport remained prohibitive for those living and working in the countryside, with diesel on sale at a “crippling 152p per litre” in one area of the Highlands.
“On the downside to the Chancellor’s statement, a lot of work on encouraging succession planning within our industry will not benefit from the announcement that the pensions lifetime allowance is being cut and the annual pension contributions qualifying for tax relief are being reduced from £50,000 to £40,000,” he said.