Mixed reaction on allowances
CHANCELLOR Kenneth Clarkes decision to leave capital allowances unchanged, despite concerted lobbying from the NFU and Federation of Small Businesses, got a mixed reaction from the Smithfield FarmTech budget panel.
Granting 100% allowances in the first year on up to £50,000 of new equipment would have given a real boost to the industry and was a missed opportunity, said NFU chief economist, John Malcolm.
But David Bolton of Andersons believed that, in the current climate, even 25% was generous. "Asking for 100% now is like writing to Father Christmas at the wrong time of year," he said. Instead, farmers should be encouraged to use their profits to sort out their personal finance, rather than waste money on new machines they didnt need just to avoid tax.
Machinery expert, Geoff Burgess, agreed that 100% allowances would lead to unwelcome distortions for the trade, causing a surge in sales, followed by a dip. "What we need is steady orders," he said.