NFUS: chancellor’s plans undermine farm succession
A reduction in the amount of annual pension contributions qualifying for tax relief could hamper succession planning, NFU Scotland has warned.
The measures, announced by Chancellor George Osborne in his Autumn Statement yesterday, will result in the annual tax-free allowance into pensions being cut from £50,000 to £40,000, and a drop in pensions lifetime allowance from £1.5m to £1.25m from 2014.
“A lot of work on encouraging succession planning within our industry will not benefit from the announcement that the pensions lifetime allowance is being cut and the annual pension contributions qualifying for tax relief are being reduced,” said a NFUS spokesman.
The union welcomed plans to increase annual investment allowance tenfold from £25,000 to £250,000, taking effect from 1 January 2013 for two years, but warned it may not benefit farmers immediately.
“Given the difficult year that most Scottish farm businesses have faced, many may not be in a position to make use of this immediately, but a better 2013 may mean it will be of benefit to farm businesses the following year,” said the spokesman.
The NFU also welcomed the plans and said it would be a boost to farming businesses.
“This move will pay dividends. We firmly believe that one of the key drivers to help push the economy forward is investment in new technology, which in turn will increase productivity and efficiency,” said NFU chief economist Phil Bicknell.
NFU Scotland said it welcomed news that the 3p/litre rise in fuel duty had been scrapped, but warned that the price of diesel in some parts of the Scottish Highlands – 152p/litre in one area – was still crippling producers.
A 1% reduction in corporation tax was welcomed, but the union said it would only benefit an estimated 5% of farm businesses, as the majority are either sole traders or partnerships.
“As ever, the devil will be in the fine detail – the tax proposals for the Finance Bill 2013 will be published next week – but there are a number of plus and minus points that emerged from the chancellor’s statement,” said the NFUS spokesman.
Investment allowance rise good for farming