Farmers are urged to take advantage of the current tax reliefs available, as from 6 April 2012 changes will be made that will reduce the savings possible on investments made in plant & machinery.
Capital Allowances have been quite generous for the past couple of years, with 100% tax relief on investments in new equipment up to £100,000 and 20% tax relief on any expenditure above this.
But as of 6 April 2012 the tax relief is to be reduced to:
· 100% tax relief for money spent on new equipment up to £25,000
· 18% tax relief on any expenditure above this
This means that tax relief on any large plant like tractors, harvesters, drills or cultivators will be restricted, as will static equipment such as dryers, milking parlours and grading machines.
New legislation on caged hens and slurry storage facilities will require investment in new buildings and fixtures. It is imperative the timing is right for this and any other large expenditure needed. The difference between a purchase before 5April and after could be thousands of pounds in tax savings. So if you need to…….look at the calculations now!