Brown statement spares farmers from any shocks
Brown statement spares farmers from any shocks
By Robert Harris
CHANCELLOR Gordon Browns pre-Budget statement contained few surprises for agriculture.
While there was no new money on the table for farmers or rural businesses, the Chancellor did confirm several earlier announcements which could take shape in next Aprils Budget.
A pesticide tax remains the biggest threat, according to Carlton Collister, senior tax manager at Grant Thornton. "The Chancellor restated his intent to review the environmental benefits of the current voluntary package on pesticides, which has been in operation since April, before the 2002 Budget."
If he decides that package does not measure up, the new tax could be introduced in April 2003, said Mr Collister.
But the Crop Protection Association remains hopeful that results collated from its 27 projects aimed at safer, more targeted pesticide use will persuade the Chancellor to hold off.
"There has been a lot of enthusiasm to get the job done," said a spokesman. "We are all well aware of this sword hanging over us."
The pre-Budget statement contained some better news, too. "The Chancellor confirmed the maximum business asset taper relief for capital gains on individuals will be available after two years ownership, rather than four," said Mr Collister.
"This means the effective rate of tax for a higher rate taxpayer is reduced to 20% after one years ownership and 10% after two years."
Changes to tax relief on "intangibles" in companies mean that livestock and milk quotas are now included. Tax relief will be available on the purchase of new quotas (based on the amortisation rates in companies accounts).
Inheritance tax, seen by many observers as a soft target, appears to have escaped this time round, but increased NHS funding could mean a tax hike. This could foreshadow inheritance tax increases, said Mr Collister.
Biodiesel duty
Mr Brown also announced a cut in biodiesel duty to 20p/litre below ordinary diesel to offset higher production costs. Further tax incentives for other green initiatives are planned.
"The new low rate for biodiesel will not in itself make the growing of these crops economically viable, but it is a step in the right direction," said John Smith, chairman of NFU Scotlands legal and technical committee.
The Chancellor said the government would discuss fuel duty cuts (4p/litre for petrol and 8p/litre for diesel) ahead of the Budget and another consultation on modernisation of the road haulage taxes.
Vehicle excise duty on all types of lifting and loading equipment will be abolished in the next Budget, one year after tractors were made exempt. *