Farmers whose business operates as a limited company have just eight months remaining to take advantage of the ‘super capital allowance’ that provides 130% tax relief on major purchases of plant and machinery.
The allowance was introduced by the government in April 2021 to boost business investment but comes to an end on March 31st, 2023.
The scheme could see farmers operating as a limited company save tens of thousands of pounds in corporate tax if they apply in time.
For example, it could see taxes cut by up to 25 pence for every pound invested, creating a corporate tax saving on a £1m investment of £247,000.
This is compared to £190,000 under the previous regime.
But Ian Parker, Director of Whitley Stimpson, urged any farmers wanting to take advantage of the scheme to apply as soon as possible.
To claim, any plant or equipment purchased must be delivered and in use before the March 2023 deadline.
Ian said:
“With the scheme remaining open for another eight months, it might seem like there is a long time left to apply. But in reality, this isn’t the case. That’s because to claim the 130% tax relief on the purchase, it must have been delivered and be in use on the farm. Buying big plant or machinery is not a quick decision. They are expensive bits of kit and making decision on what to buy can take time. If you add lead time to this, all of a sudden the remaining eight-month window doesn’t seem long at all, and I would urge any farmers wanting to access the scheme to do so as soon as they can.”
The super capital allowance scheme is only available to farmers who operate as limited companies, not to sole traders or partnerships.
For more information about accessing the scheme, call (01295) 270200 or email ianp@whitleystimpson.co.uk.