George Osborne's Summer Budget included a commitment to set the Annual Investment Allowance at £200,000 permanently - echoing NFU lobbying.
We called for such a move in our submission ahead of the Budget, and stressed the vital need for fiscal policy which encourages investment in our manifesto lobbying during the run-up to the General Election.
NFU chief economist Gail Soutar said: “We are pleased that the Chancellor announced that he would be setting the Annual Investment Allowance permanently at £200,000. The NFU highlighted the need for the government to set a long term, substantial level for AIA in our manifesto in order to give some security to our farmers and growers who can better plan for the future by investing in their businesses – which is particularly important during these volatile times.
"Unfortunately the current capital allowances system does not fully reflect the full cost of investment for farmers. We had hoped to see some progress on buildings and fixed structures that are considered wasting assets. Similarly reductions in corporation tax will have a limited impact on the 92.5% of farm businesses that are sole traders and partnerships.
“Like many people across the country, our members will be relieved that fuel duty will remain frozen for the remainder of the year.
“There were several other announcements made today that we will need to explore in further detail.”
- The Summer Budget - our submission
- What's the farming bottom line? Our taxation and economic intelligence channels
- Blog: British farmers have the ear of the Chancellor