CLA welcomes Chancellor’s increase of Annual Investment Allowance for machinery

Chancellor’s decision to increase the Annual Investment Allowance for plant and machinery

The Country Land and Business Association (CLA) said the Chancellor’s decision to increase the Annual Investment Allowance for plant and machinery 10-fold from £25,000 to £250,000 is great news for the rural economy in the North.

CLA North Regional Director Dorothy Fairburn said: “This means farmers will be able to claim 100 percent capital allowances against their earnings on up to a quarter of a million pounds of equipment a year, for the two years from January 2013. This could kick-start investment in farm machinery, renewable energy projects and other diversified rural businesses.”

Miss Fairburn said she was disappointed the Government continues to fail to recognise that many small rural businesses are not incorporated.

She said: “The Chancellor’s reduction in the Corporation Tax rate to 21 percent is of no use to a sole trader or partnership, the favoured business structures in the countryside.

“We welcome the introduction of the simpler system of cash-based accounting although the ceiling of £77,000 turnover means that it will be of little use. However, if the threshold were increased, it could be an excellent scheme and make a real difference to rural businesses.”

Miss Fairburn said, while it was good news that newly completed properties would not attract rates while empty for the first 18 months from October 2013, the Chancellor does not appear to have done anything in his Autumn Statement to help the owners of existing empty business premises, despite the CLA and others making him aware of their plight.

The CLA also supported the Chancellor’s cancellation of the fuel tax rise planned for January 2013. She said: “For rural communities, this is particularly welcome.”

See said the broadband upgrades and £10billion house building guarantees for towns and cities announced by the Chancellor could increase the urban-rural divide.

Miss Fairburn said rural areas desperately need adequate broadband connections and housing but, once again, the new investment is going to urban, not rural, areas.

She said: “It is all very well to pour money into cities to give them state-of-the-art broadband but many rural areas still suffer from slow or no broadband.

“The £10billion support provided to the institutional sector to deliver new house building will not assist rural areas because it will focus on big projects not the small-scale developments needed in rural areas.”