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Agriculture: Tax Allowances

Question for Treasury

UIN 15230, tabled on 9 June 2022

To ask the Chancellor of the Exchequer, if he will take steps to introduce tax relief for investment in (a) agricultural buildings and (b) farming equipment.

Answered on

17 June 2022

The UK’s capital allowances regime provides tax relief for investment in buildings via the structures and buildings allowance, which allows businesses to deduct 3 per cent of the cost of construction and renovation of non-residential structures and buildings a year.

The UK’s capital allowances regime also provides tax relief for investment in plant and machinery. For example, the super-deduction allows companies to claim 130 per cent of qualifying plant and machinery investments for expenditure incurred from 1 April 2021 until the end of March 2023. The Annual Investment Allowance (AIA) currently provides 100 per cent relief for plant and machinery investments up to £1 million. At Autumn Budget 2021, the Government extended the temporary £1 million AIA limit to 31 March 2023.

In the Spring Statement 2022, the Chancellor set out a series of potential policy changes to the UK’s existing capital allowances regime, which the Government will consider ahead of the end of the super-deduction. HM Treasury is currently seeking the views of businesses on the different options via business engagement and a survey that can be found here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1062708/Spring_Statement_2022_Print.pdf.

Answered by

Treasury