Buildings tax break will end

Government plans to withdraw valuable tax breaks on agricultural buildings appear to be going ahead despite protests from farmers’ representatives.

It now looks increasingly likely that farmers who made big investments in new buildings and were expecting to write off 4% of the total cost for up to 25 years will face significantly higher tax bills.

Gordon Brown announced in his March budget plans to gradually remove agricultural buildings allowances by 2011. The process will begin from April 2008 when the allowance slips from 4% to 3% and is stripped away at 1% a year.

Grant Thornton’s Carlton Collister said the House of Commons Finance Bill Committee’s belief that 95% of the £60m of tax relief under ABA’s went to large businesses was also flawed.

“I have two dairy farmers who have expanded recently and will have unused Agricultural Buildings Allowances of £660,000 and these are not large businesses,” he said.

The NFU’s head of tax Kevin Pantling said he would continue to lobby the Treasury as the bill progressed. “The remainder of the legislation will not be published until Finance Bill 2008.”