Jonathan Reynolds – 2015 Parliamentary Question to the Department for Environment, Food and Rural Affairs

The below Parliamentary question was asked by Jonathan Reynolds on 2015-12-11.

To ask the Secretary of State for Environment, Food and Rural Affairs, what steps her Department is taking to support farmers to invest in new capital equipment.

George Eustice

Investment in the agriculture sector is an important driver to improving its productivity and growth. To support this, the Government has a range of tax and subsidy measures in place.

The Annual Investment Allowance is at its highest ever permanent level of £200,000, with effect from 1 January 2016. This is of particular benefit to firms investing heavily in plant and machinery, such as those in the agricultural sector. From April 2016, self-employed farmers will be able to average their profits for Income Tax purposes for two years or five years. This will enable farmers to spread volatile profits further and better plan their investments.

The Government also supports the agricultural sector through direct recognition of any actual depreciation in the capital gains tax computation at the point of sale. Agricultural land and buildings remain subject to a number of tax reliefs and exemptions including exemptions from business rates, agricultural property relief from inheritance tax and capital gains rollover relief on developed agricultural land.

The Government also supports investment in the agricultural sector through capital grants under the Rural Development Programme. This is primarily through the Countryside Productivity scheme, focusing on innovative investment that will lead to a step change in productivity.