The Office of Tax Simplification (OTS) has published its report on Simplifying tax relief for tangible fixed assets. This project has been of considerable interest to the NFU, particularly given the capital intensive nature of farm businesses. Indeed, NFU Head of Tax Michael Parker was asked to be a member of the OTS consultative committee.
During the course of the review the OTS were invited to visit some NFU members’ farms to see how they operate, the systems they use, the type of capital investments they make, and to discuss their views of the capital allowances system, its complexities and whether using accounting depreciation would be simpler.
We welcome the Office of Tax Simplification’s work in this area and will carefully consider the report. We are however pleased this report highlights both the complexity of the capital allowances system and its limitations. We very much welcome the suggestions of extending the scope of the Annual Investment Allowances and Capital Allowances and simplifying how capital assets are identified for tax purposes.