The maximum amount of tax relief available under the Annual Investment Allowance (AIA) for qualifying purchases made between 6th April 2014 and 31st December 2015 has doubled from £250,000 to £500,000.
AIA is a capital allowance that provides 100% tax relief on qualifying expenditure for agricultural plant and machinery in a specific period against income or corporation tax.
According to HM Revenue and Customs (HMRC), increasing the maximum amount of qualifying expenditure that is subject to the tax relief to £500,000 will incentivise firms to increase or bring forward their capital expenditure on plant and machinery and provide a cash flow benefit that is likely to be of most help to small and medium-sized firms.
The announcement has been welcomed by agricultural experts, who claim that it will provide a boost for farmers and other individuals who are considering investment in the agricultural industry. From 1st January 2016, the AIA will be reduced to £25,000. Experts including NFU Mutual, are appealing to the Chancellor to make the increase permanent in his 2015 budget.
For further information contact a member of our Agricultural/Rural Business team.
Myerson are the premier agricultural solicitors in Cheshire and South Manchester. Our agricultural expert solicitors can advise on all aspects of Agricultural/Rural Business law.