Defra's budget down by £20m
DEFRA’s budget for next year has been slashed by £20m, with a further cut of £35m in 2014/15.
Defra said the cut amounted to about 2 per cent in total.
Last week the department was given £120m to go towards flood defence schemes.
Announcing the changes in his autumn statement, chancellor George Osborne said Britain was ‘on the right track’ to cut the deficit, but Labour said his economic plans to boost the UK’s struggling economy were ‘in tatters’.
Experts said farmers could be given a boost by the two year increase in the Annual Investment Allowance from £25,000 per year to £250,000. This is available from January 1 2013, for SMEs to invest in plant and machinery.
“This will be an enormous help to stock farmers looking to upgrade slurry stores and arable farmers buying expensive big ticket items like harvesting equipment,” said partner with Dodd & Co, Rob Hitch.
Paul Aplin, tax partner at South West firm AC Mole and Sons added: “Small businesses in the South West have had little to celebrate in recent budgets but today’s announcement of a ten-fold increase in the capital allowances annual investment allowance is very welcome news. It will encourage small firms – from farmers to manufacturers - to invest in the new equipment they need.”
The other major announcement was the reduction in the lifetime allowance for pension savings.
This will fall to £1.25 million and whilst it will impact upon many employees in defined benefit pension schemes it may also impact on farmers who have used pension plans to acquire farms, experts said.
For those with diversified activities on their farms the Small Business Rate relief ‘holiday’ has been extended to April 2014, giving a welcome boost enterprises such as B and B and holiday lets.
NFU Mutual said it hoped there would be more in the statement to boost rural businesses, including super-fast broadband and more money for flood defence schemes.