Farming groups have welcomed the announcement that the Annual Investment Allowance for machinery will remain at 100% relief on investment of up to £1 million per annum.
Chancellor Kwasi Kwarteng outlined on Friday (23 September) the biggest tax cuts in 50 yearsin response to the cost-of-living crisis, with numerous measures set to benefit farming businesses.
The 'mini-budget' was unveiled to help tackle energy costs for both businesses and households, with Mr Kwarteng announcing a variety of tax cuts.
One measure welcomed by the industry is that the Annual Investment Allowance for qualifying plant and machinery is to remain at 100% relief permanently.
The government had planned on reverting to the lower £200,000 limit from 31 March 2023.
NFU President Minette Batters welcomed the announcement, but she called for it to be extended to cover buildings and structures.
“The annual investment allowance will remain permanently at £1m will be welcome news to many farmers, enabling them to plan and make investment decisions at the earliest opportunity," she said.
"We now need to see this extended to cover buildings and structures to encourage greater investment in farm infrastructure."
Sean McCann, chartered financial planner at NFU Mutual, added that the move had been 'welcomed' by farmers.
As part of the AIA, businesses are able to claim in respect of their expenditure on both general and "special rate" plant and machinery.
It therefore applies both to farm machinery and equipment such as heating, lighting, ventilation and water systems.
It also applies to most forms of slurry store and renewable energy equipment.