In the Finance Bill 2018 a temporary increase in Annual Investment Allowance for a two year period, starting in January 2019, was announced.
We are approaching the end of that temporary increase period which will reduce from its current level of £1million on the 31st December 2020, reducing back to £200,000 from that date onwards. Even in the runup to the end of this period, transitional rules apply meaning that if a business with a 31st March year end were to spend money now on qualifying plant and machinery, the maximum allowable for annual investment allowance would be £800,000. Clearly, if businesses are considering this sort of expenditure it is essential to take an accountants advice and the sooner the better however, given that this initiative was initially brought in to stimulate investment, and given the current emphasis on maintaining or even reviving economic activity through the pandemic, one wonders if the Government might consider extending the benefits that this temporary increase has clearly given, certainly worth some thought and perhaps lobbying of those in power.
All this highlights that we have to look at farming in its widest sense. It becomes increasingly clear that we cannot simply press on without regard to the changes that are being forced upon us. The detail of the Entry Level Management Scheme has yet to be published, indeed it is probable that it isn’t in its final form yet. However It is clear that there will be opportunities to steer businesses away from total reliance on traditional agricultural produce. Instead Water and Soil management are likely to become income sources as well as being as desirable as they have always been. However, you are most unlikely to be paid for what you are already doing! The position is constantly changing. So take advice and try to keep up with the announcements as they happen.
This is an endless topic but surely if the lockdown taught the general public anything it has to be that food security (and toilet roll supplies) should be very high on governments agenda. UK farming will continue to play a central and vital roll in this. We have to hope that the Agriculture Bill eventually reflects the importance of food production.