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David Robertson
Associate Director, Perth Office
The withdrawal of the Agricultural Buildings
Allowances over a four year period ending in the
2010/11 tax year will undoubtedly have some
effect on farmers’ decisions as to whether they
invest in new farm buildings, or indeed, extend
or improve existing farm buildings. Whereas up
to now the full cost could be set off against
the farm business profits, albeit over a twenty
five year period, only 10% (in total) will be
available over the next four years and nothing
thereafter, even for buildings constructed prior
to the budget speech. Those businesses claiming
Industrial Buildings Allowances will also find
themselves in a similar situation.
Reforms to the capital allowances system
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have been proposed for 2008/09. These include
the replacement of the current 50% first year
allowances for small businesses (40% for medium
sized businesses) with a new annual investment
allowance of £50,000. This will be available to
all businesses, regardless of their size or
legal form. Under the scheme, businesses will be
able to obtain a 100% deduction from their
taxable profits on capital expenditure up to
£50,000 for the purchase of general plant and
machinery with the exception of cars. In
addition, the rate of writing down allowance for
the general plant and machinery pool will reduce
from 25% to 20%. Outline proposals on capital
allowances for cars were also announced, the
most interesting of which was that cars with CO2
emissions between 121g/km and 165g/km will be
included in the general plant and machinery
pool, thereby restricting the availability of
balancing allowances on their disposal. A new
pool with a lower writing down allowance would
be created for those cars with a CO2 emission
above 165 g/km. All of the foregoing proposals
are subject to consultation however and
businesses should hold off making plans based on
these proposals until full and final details are
available (probably late summer 2007). |
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It will probably be news to most people that the
government set up the Gangmasters Licensing
Authority in April 2005 to curb the exploitation
of workers in the agriculture, horticulture,
shellfish gathering and the associated
processing and packaging sectors. It is for this
very reason that the agency has recently mounted
a campaign to raise its profile within the
agricultural and forestry sector in Scotland.
The legislation requires any individual or
organisation supplying temporary labour to any
of the above industries to be registered
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or exempted. Providing work to an unlicensed
‘Gangmaster’ is also an offence with penalties
of a prison sentence or fine. Interpretation of
the Act is confusing whilst definitions of
temporary labour and exemptions are tested. The
use of machinery owned or hired by the service
provider appears the most likely qualification
for exclusion. However, the advice is clear; if
considering offering temporary work, ensure that
the contractor or ‘Gangmaster’ is licensed or
exempt. The GLA website
www.gla.gov.uk
provides further information and a public
register of all licensees. |
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