Saturday 26 May 2012
Headlines
Did you find this story interesting? (0) (0)
23/01/2012 13:29:21
Invest in machinery or lose tax relief, warns Old Mill
Farmers seeking to buy new machinery or equipment this year must act quickly, or face losing £10,000s of tax relief, warns accountant Old Mill.
With Capital Allowances set to change dramatically from April, rural businesses should consider bringing forward their investment, says Neil Cox, senior manager of rural services. "In recent years tax relief on the purchase of plant and machinery has been relatively generous – but that is about to change.
"Currently, most businesses can write off up to £100,000 of qualifying plant and equipment expenditure against profits each year, using the Annual Investment Allowance (AIA). But from April the allowance will be slashed to just £25,000, with any expenditure above that threshold receiving annual relief of just 18%, compared to 20% at present.
"Inevitably, this will lead to higher tax bills for businesses. For example, a farming partnership with annual profits of £100,000, investing £40,000 on average in equipment each year, could see its tax bills rise by £4,500 a year."
Those with account year-ends other than 31 March / 5 April need to be particularly careful because of hybrid allowances that will be in place during 2012. "Most equipment will need to be bought before the end of March to get full relief, adding an extra degree of complication."
Old Mill will be making the most of Somerset’s Agricultural Machinery and Equipment Show on February 1 to help farmers and rural businesses decide how best to invest their money. "The show offers farmers an ideal opportunity to combine getting the best deal on new kit and planning to minimise future tax bills," says Mr Cox.
"As well as sponsoring the show’s seminars, we will be providing expert guidance on investing in the future of your farm, including how to make your proposition more attractive to banks and looking at aspects of company structure and tax planning."
With Capital Allowances set to change dramatically from April, rural businesses should consider bringing forward their investment, says Neil Cox, senior manager of rural services. "In recent years tax relief on the purchase of plant and machinery has been relatively generous – but that is about to change.
"Currently, most businesses can write off up to £100,000 of qualifying plant and equipment expenditure against profits each year, using the Annual Investment Allowance (AIA). But from April the allowance will be slashed to just £25,000, with any expenditure above that threshold receiving annual relief of just 18%, compared to 20% at present.
"Inevitably, this will lead to higher tax bills for businesses. For example, a farming partnership with annual profits of £100,000, investing £40,000 on average in equipment each year, could see its tax bills rise by £4,500 a year."
Those with account year-ends other than 31 March / 5 April need to be particularly careful because of hybrid allowances that will be in place during 2012. "Most equipment will need to be bought before the end of March to get full relief, adding an extra degree of complication."
Old Mill will be making the most of Somerset’s Agricultural Machinery and Equipment Show on February 1 to help farmers and rural businesses decide how best to invest their money. "The show offers farmers an ideal opportunity to combine getting the best deal on new kit and planning to minimise future tax bills," says Mr Cox.
"As well as sponsoring the show’s seminars, we will be providing expert guidance on investing in the future of your farm, including how to make your proposition more attractive to banks and looking at aspects of company structure and tax planning."
|
Farming items for Sale
|
New Holland TS110 - Ballyclare(GBP 17520)
New Holland TD95 D - Chulmleigh(GBP 14400)
Used New Holland TM 135 - York(GBP 12950)
John Deere 3350 - DAVENTRY
(Price on Application)
(Price on Application)
John Deere - 8530 TRACTOR - Norwich(GBP 91000)
Related News
Contractors risk losing agricultural tax reliefs, warns Old Mill - 10 Aug 2009Agricultural contractors risk losing valuable tax relief on their farmhouse, buildings and land, according to accountant Old Mill. Many farmers h...
Dairy farmers invest to improve profits, says Old Mill - 04 Oct 2011South West dairy farmers continue to expand and enjoyed a 15% jump in net profits this year, according to a survey by accountant Old Mill. The an...
Farmers must act to recover tax during difficult times, says Old Mill - 25 Aug 2009Arable and dairy farmers are facing a difficult year, but could recover £1000s in tax, according to rural accountant Old Mill. "With cereal price...
Beware tax pitfalls when housing self-employed workers, says Old Mill - 10 Nov 2009Farmers who provide housing for self employed workers run the risk of losing valuable Inheritance Tax relief on the value of their farm cottages. ...
Documentation key to reducing inheritence tax - Old Mill - 10 Jun 2010Farmers should keep detailed documentation of farming activities to ensure their estates qualify for Agricultural Relief from Inheritance Tax, warns a...
Old Mill Rural Services warn: Don - 07 Dec 2006With the current rise in commodity prices it is inevitable that tax liabilities on profits for some farmers will also increase. While many arable farm...
Tax relief on grass keep is under attack, warns accountant - 21 Jul 2008Landowners letting land under grass keep arrangements may not get full Inheritance Tax relief under a new interpretation of the law, warns accountant ...
Old Mill pleased to continue sponsorship of Cattle Presentation Awards - 03 Jun 2008Old Mill Rural Services was pleased to present this year's Cattle Presentation Award to Nick Hill from Decoy Pool Farm, Cheddar, at the Royal Bath...
Old Mill holds seminar on the economics of renewable energy - 24 May 2010Renewable energy projects are becoming a realistic option for many farmers, and could yield considerable financial and environmental gains, says rural...
Old Mill celebrates livestock presentation - 10 Jun 2010Old Mill Rural Services was pleased to continue its support of livestock exhibitors at last week’s Royal Bath & West Show, sponsoring two presti...
