Industry reaction to Chancellor’s Autumn Statement

Industry reaction to Chancellor’s Autumn Statement

The Chancellor’s announcement of a tenfold increase in annual investment allowance from £25,000 to £250,000 will be a boost for farming, said the NFU.

The move, announced by Chancellor George Osborne in today’s Autumn Statement, will bring forward tax relief on plant and machinery investments from January 2013 for a two-year period.

Reaction from the British Poultry Council’s chief executive, Peter Bradnock was mixed: “The Chancellor’s focus on growth and support for British business is welcome. The poultry meat sector, like other agri-food sectors, has been suffering from the increasing cost of grain. This has impacted on the cost of food and helped to push up inflation further than originally expected by the OBR. An additional cut in corporation tax will help to relieve some of this pressure, subsequently supporting the poultry meat and other rural farming sectors.

“However, we are disappointed by the Government’s failure to change the VAT rules on rotisserie chicken. This 20% tax hike in British chicken reared in British farms and bought freshly cooked in the supermarkets has hit shoppers and farmers. We will continue our campaign to get the Government to reverse this unfair tax.”

NFU chief economist Phil Bicknell said: “I am delighted the Government has listened to the NFU’s call for a significant increase in the annual investment allowance. Immediate spending increases on plant and machinery may be limited for many following the challenges of this year’s harvest, but this will undoubtedly boost farm business investment over the next two years.

“The relief will benefit farmers, given that farming is a primary industry that has to continually invest in plant and machinery. Advancing tax relief helps with cash flow and funding, ultimately supporting investment across farming sectors.

“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.

“As ever, the devil is in the detail. We will study all relevant announcements in greater depth as they become available, and assess the full impact of the Chancellor’s plans on agriculture. For the time being, the fact that Government has taken this step to increase the annual investment allowance appears to be the key headline from a farming perspective.”

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