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Non-Domestic Rates: Agriculture

Volume 470: debated on Thursday 24 January 2008

To ask the Chancellor of the Exchequer (1) if he will make it his policy to (a) reinstate and (b) extend the scope of the agricultural buildings allowance; (178158)

(2) if he will make it his policy to introduce tax relief for agricultural infrastructure required to comply with the Nitrate Vulnerable Zones regulations.

Agricultural buildings allowances (ABAs) were introduced in 1945 to encourage post-war reconstruction. They are now a poorly focused subsidy, selectively available on a disparate range of assets, including some that typically appreciate in value. ABAs have long been recognised as a significant distortion in commercial property investment. These issues are compounded by the compliance burden imposed by their complicated rules.

The phased withdrawal of ABAs is part of a package of measures which also saw the reduction of the main rate of corporation tax and the basic rate of income tax and the introduction of a £50,000 annual investment allowance (AIA), allowing 95 per cent. of businesses to write off all their expenditure on plant and machinery in the year in which it is made.

Slurry tanks used for temporary storage in Nitrate Vulnerable Zones are eligible for capital allowances and businesses will therefore be able to benefit from the AIA when investing in this infrastructure.