In a statement issued on 12 November, the Treasury made a number of announcements including extensions to the consultation period on:

• Plastic Packaging TaxTackling
• Construction Industry Scheme abuse
• R&D SME tax credit PAYE cap
• Tax implications of the withdrawal of the London Inter-Bank Offered Rate (LIBOR)
• Hybrid and other mismatches

New consultations were also announced for enhanced anti-avoidance measures and Making Tax Digital for Corporation Tax, increases in tobacco duty were announced and it was confirmed that changes to vehicle excise duty for light goods vehicles will be deferred.

In within these fairly mundane matters, it was also announced that the extension of the Annual Investment Allowance to £1m from £200,000 will be extended for a further 12 months. The report stated:

“Extending the Annual Investment Allowance provisional £1 million cap

The Government is today announcing a yearlong extension to the temporary increase of the Annual Investment Allowance (AIA). The AIA provides firms 100% same year tax relief on qualifying capital expenditure, up to a fixed limit. Instead of allowing the AIA to revert to £200,000 from 1 January 2021, the Government is extending the temporary £1 million cap set at Budget 2018 until 31 December 2021. This announcement:

• Responds to the needs of business, giving enhanced tax relief on plant and machinery expenditure;
• Provides businesses with upfront support during continuing COVID-related uncertainty;
• Simplifies taxes for the 99% of businesses investing up to £1 million on plant and machinery assets each year.”

Whilst this may be of limited relevance to those businesses which are struggling with the effects of COVID, it will be welcomed by larger agricultural enterprises, particularly those which are investing heavily ahead of the major subsidy changes which will begin to take effect next year.