Ulster Unionist Party Leader, Robin Swann MLA, has welcomed the creation of a new tax allowance which will allow farmers to claim back the cost of new buildings at a rate of 2% a year for 50 years.
The new allowance was confirmed in Monday’s Budget, which was announced by Chancellor Philip Hammond.
Mr Swann (pictured) said: “Following Monday’s Budget, the Chancellor of the Exchequer has revealed that farm businesses will now be allowed to claim 2% of the total build cost of new buildings after construction is completed; effectively writing the cost of sheds down after 50 years.
“This will come as a big financial incentive for any farmer currently considering putting up new farm buildings.
“Whilst this Structures and Buildings Allowance (SBA) only applies to buildings that have not yet been started and for which contracts haven’t yet been signed, importantly for local farms with older units, refurbishment projects also fall under the new scheme.”
Mr Swann said the announcement of the relief had come as a surprise.
Mr Swann continued: “Whilst the new relief is still not as generous as the old Agricultural Buildings Allowance, which was abolished in 2011, I was pleasantly surprised that in this day and age of constant pressures on UK finances that the Exchequer announced any new relief at all.
“Whilst some people will understandably be frustrated that it will take a 50 year time-span to reclaim the total cost, I believe any relief is better than none so I still think that it will come as a welcome step for the industry.
“If farmers are thinking about constructing new buildings I would urge them to carefully consider all the details of the allowance. The cost of land, plant and materials, legal expenses and any expenditure surrounding planning permission for instance are all not covered by it.
“In addition, if the buildings are subsequently sold, the allowance would transfer to the new owner.
“Some costs – such as plant and material - will still be covered by the Annual Investment Allowance, which I was glad to see raised from £200,000 to £1m from 1 January next year.
“Importantly, however, that increased rate will only remain in place for two years so I would urge any farmer who may be considering very significant farm projects to move within the qualifying time-frame.”
Mr Swann added: “This is a UK-overall policy so at least we can also be assured that it won’t get dragged down to become a bureaucratic mess like the Tier 2 of the local Farm Business Improvement Scheme.”