Farming News - AIA increase & Rural Broadband investment announced in Budget

AIA increase & Rural Broadband investment announced in Budget

AIA Investment Increase

The Chancellor announced an increase in the Annual Investment Allowance five-fold from £200,000 to £1 million to help farms businesses invest in  plant, machinery & buildings. The NFU welcomed the increase but were disappointed that it was to be time-limited for two years as did Derek Walsh, Partner at law firm Coffin Mew who commented:"..the increase in Annual Investment Allowances to £1m for two years falls short of what industry representatives had requested and, as the agriculture sector generally has longer term investment cycles, longer term solutions are required."

Structures & Buildings

A  new Structures and Buildings Allowance for non-residential structures has gone some way to meet tax relief on investment in farm infrastructure and will help farmers invest in modern, efficient buildings. Farmers will now be able to deduct 2% of the cost of any new non-residential structures & buildings from profits before they pay any tax.

No Brexit clarity but good news for self employed farmers

“Farmers desperately seeking clarity from the government to help them plan for the long-term, received little to comfort them. Huge questions remain over the future funding of rural support after Brexit, making it hard for farmers to plan investment in their businesses,” said Tim Price, Rural Affairs Specialist at NFU Mutual in his budget response.

“At first glance, there was not a lot for farmers to get excited about – but there are a few measures which will ease tax bills – and it’s a huge relief that the Chancellor avoided increases in duty on petrol and diesel which would have hit country people very hard.

“There was good news for self-employed farmers and all those working as employees that the Chancellor has stuck to the Tory’s promise to keep increasing personal tax allowances.  The amount of income that can be earned before paying tax will increase to £12,500 and the higher rate won’t kick in until an income of £50,000 is reached – which means a few hundred pounds more out of the taxman’s grasp.

“Apparently there’s no ‘sting in this tail’ on the widely forecast pension contribution cuts and Inheritance Tax changes which would have hit self-employed farmers hard at a time of tightening belts in agriculture and the food chain as Brexit approaches.

“Let’s hope a big chunk of the Chancellor's £420m pothole fixing fund finds its way to fix our rutted and crumbling rural road network.

“The Chancellor’s announcement of £10m funding for Air Ambulance services is good news for farmers and country people – those living in remote areas need these services most as they face long trips to get to hospitals if they are involved in an accident or are seriously ill.”

National Living Wage Increase

The NFU said “The announcement today that the National Living Wage will increase by 4.9% is substantially more than the sector expected and comes at a time when farm businesses are faced with a rising cost base. We will continue to engage with the Low Pay Commission on this issue.”

Rural Broadband Investment

CLA President Tim Breitmeyer said: “The Chancellor has prioritised connecting the countryside like never before. Digital connectivity is vital to boosting rural economic growth and this funding will go towards projects which should lead to the deployment of full fibre broadband in the hardest to reach areas.

“However, although this is very welcome cash for rural broadband, the Government has still missed an opportunity to incorporate 4G mobile connectivity into its plans to improve rural economic growth. Mobile network operators have abandoned the countryside by failing to resolve poor signal and not-spots. Introducing a single rural mobile phone network to deliver better and faster 4G coverage would prove the Government is serious about its ambition to connect the countryside.”

Minette Batters said “It is vital that this is not a one-off investment and it must be part of a continued effort to deliver better connectivity for all rural businesses.

“According to the latest NFU survey, 59% of farmers felt the broadband speed they received was insufficient for their business. We hope that this investment in the National Productivity Investment Fund will be used to address the digital divide between the countryside and urban areas.”

Anaerobic Digestion Industry Disappointment

Charlotte Morton, Chief Executive of the Anaerobic Digestion & Bioresources Association (ADBA), said: 

“We were disappointed that the Budget did not confirm a commitment to introducing universal food waste collections in England or any further funding support to encourage local authorities to introduce these where they haven’t already done so. 

 “We strongly urge the Treasury, BEIS and DEFRA to ensure the forthcoming Resources & Waste Strategy includes these measures to help end the scandal of valuable organic materials being wasted in incineration or landfill - meeting our Carbon Budgets depends on it. As highlighted by the Committee on Climate Change, we also need urgent action on replacement for the Renewable Heat Incentive by the end of the year to ensure that generation of renewable heat continues to receive government support. 

“ADBA welcomes the confirmation that Ministers will maintain the difference between alternative and main road fuel duty rates until 2032 to support the decarbonisation of the UK transport sector – this recognises the valuable role that clean fuels such as biomethane need to play.”