Three mini-budget benefits for agriculture

Jeremy Moody, Secretary and Advisor to the Central Association of Agricultural Valuers (CAAV)

After years of fluctuating when it was as low as £25,000 and was due to return from £1million to £200,000 from April 2023, the Annual Investment Allowance (AIA) for factories and machinery is now permanently fixed at £1 million. This means that all qualifying investments up to £1million can be deducted from tax, rather than amortized over time.

CAAV spoke to the Treasury about the need for greater stability within AIA, particularly given the uncertainties of current supply chains.

Farmers should be able to make a timely investment for good reasons, not just to get tax relief, but the difficulty has been knowing when to invest and whether the allowance would be available. A farmer can now decide to invest in milking robots, for example, and not run the risk if they are not delivered before next April.

The new government has also pledged to make a policy statement this fall on agricultural productivity, designating this sector as important, alongside digital connectivity and planning.

I consider this essential after the past 30 years of falling behind competing nations. We must ensure profitable agriculture by implementing the changes that CAAV and the Agricultural Productivity Task Force are working on. I hope we can help the agricultural economy to be much more productive.

However, it is not about absolute production but about business efficiency and profitability, and so it is also about business confidence and competence. We’ve gone awry in agriculture for about three decades – pretty much since the introduction of area payments.

The loss of basic payments will cause farmers to look more closely at their businesses. It would be nice to have positive stimuli to help people do that.

The Government seems to show a serious interest in the reform of town planning regulations, which is as much a brake on the rural economy as it is on the urban economy. We try to advocate for permitted development rights for slurry warehouses, for example, which are necessary to control environmental pollution.

This would help the economy move forward rather than having to wait for overwhelmed planning departments to respond.

Jeremy Moody is secretary and advisor to the Central Association of Agricultural Valuers (CAAV)

About Keneth T. Graves

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