Tax boost may not apply to farmers

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It MAY have seemed like good news for farmers when the Chancellor made his Autumn Statement to the effect that the annual investment allowance for expenditure on plant and machinery would increase to £250,000 per annum, a tenfold increase.

But after poring through the fine detail of the change which comes into place on 1 January, a leading accountant has warned that farmers should be wary before going ahead in buying new machinery.

Alan Tucker, a partner in Forfar-based EQ, said that, although the Chancellor had indicated that increase was available to all businesses, this was not the case. According to Tucker, in partnerships where there was a company or a trust involved the allowance did not apply.

He also warned that businesses needed to be very careful about the timing of their expenditure as this would affect the percentage of allowance.

The calculations of what amount actually qualifies in the business year has made more complicated by there having been two changes of maximum investment within the 12 month period.”