The chancellor’s announcement to double the rate of the Annual Investment Allowance (AIA) is welcome news for agriculture, but it would have been better if George Osborne had made it a permanent fixture, the NFU has argued.
While Osborne used his 2014 Budget to announce that he had doubled the allowance to £500,000 and extended it until 2015, the NFU believes that permanence would have helped the industry plan better for the future.
On the chancellor remarking on the beneficial effects of a reducing corporation tax ratesto 21 per cent from April 2015, the union's president Meurig Raymond, said: “Despite the reasonably good news on the investment allowance for plant and machinery, any incentives for capital infrastructure investment were sadly lacking in the Budget.
'This is all the more frustrating given that few farming businesses are in a situation to benefit from the continued reductions in corporation tax. While the chancellor talks about adding resilience and balance to the economy, farmers need to invest in capital items, and not just plant and machinery.'
The NFU, however, applauded the government's intentionto publish a long-term plan to protect the country from future flooding - something it highlighted the need for in the NFU Flooding Manifesto.
The £140 million of funding to repair and restore flood defences Osborne announced yesterday (19 March) is in addition to the £130 million announced in February.
Raymond added: “Also, with a renewed interest in careers in the agri-business sector, the industry will welcome the extension to apprenticeship grants.
'The challenge for farming will be to get its fair share from the extra £85 million that the chancellor has announced.'
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