The Treasury has released a paper aiming to 'kickstart a conversation with businesses' on proposed changes to the UK’s capital allowances regime, which will in turn affect the agri-sector.
The consultation is being carried out by the government to collect views ahead of its Budget later this year, with any changes coming into force from 1 April 2023.
It will look at how businesses make investment decisions, and how important capital allowances considerations are when making those decisions, including the impact of the super-deduction.
Additionally, the government wishes to understand how the UK regime compares around the world, and the impact capital allowances have on the decisions of multinationals when deciding whether to invest in the UK.
Specifically, the government’s consultation includes consideration of increasing the permanent level of the Annual Investment Allowance (AIA).
It also includes general First-Year Allowances (FYAs) for qualifying expenditure on agricultural plant and machinery.
Responding to the announcement, chartered accountants Saffery Champness says the consultation is as relevant to the agri-sector as it is to any other.
The firm explains that the availability and extent of capital allowances can be a major influencing factor for rural businesses of all sizes in the purchase of farm machinery, plant, and other ‘big ticket’ items.
Responses to the consultation are requested by 1 July 2022.