Farm businesses with a September year-end need to look carefully at how they use the bigger annual investment allowance.
In March, chancellor George Osborne announced a doubling of the yearly relief to £500,000 for spending on plant and machinery until December 2015.
Businesses with a year-end of 30 September 2014 will be able to offset £372,000 of expenditure against profits, taking into account the lower allowance in the six months to 30 March.
Next year, businesses will able to spend up to £500,000 at any date in the accounting year. The limit will drop back to £25,000 in December 2015.
Businesses will then have to work out how much of the previous higher allowance they are able to use at the end of that accounting year.
John Husband, director at John F Harvey chartered accountants, said businesses should make best use of the available relief.
“If you have got this great big allowance it will be worth spending money that year against the tax relief even if you do not need it that year,” he said.
“You can either bring it back against previous years or carry it forward against a later year.”
Mr Husband said one difficulty for many business owners was identifying what qualified for relief and what did not.
Moveable plant and machinery, such as tractors, trailers and combines are easier to identify, but equipment inside buildings can be more difficult.
For example, spending on a new milking parlour could qualify but not necessarily the cost of the building around it.
Similarly, a slurry system under cow sheds would qualify, but the buildings above would not.
“Maybe spend on plant and machinery before September 2016 and spend on buildings after if you can do it,” Mr Husband said.
“Unfortunately you have to put the buildings up before the machinery in most cases.”
Those looking for advice on what qualifies for relief should visit the HMRC website or ask their accountant, Mr Husband added.