To encourage investment in environmental protection in the farming sector, a scheme of improved capital allowances in respect of expenditure incurred on buildings or structures necessary for the control of pollution was introduced for a three year period from 6 April 1997. This relief was extended for three years in the Finance Act 2000 and a further three years in the Finance Act 2004 until 31 December 2006.
The relief has been improved since its original introduction. The ceiling on the maximum amount which can be claimed in the first year was increased from €12,700 to €19,050 in the Finance Act 1998 and to €31,750 in the Finance Act 2000. A more flexible writing down arrangement was introduced in the Finance Act 2000 whereby the writing down period was reduced from eight to seven years. These writing down arrangements allow farmers, in respect of expenditure incurred on or after 6 April 2000, to elect to have allowances granted over the writing down period at 15% for the first six years and 10% in year seven. Alternatively, farmers can elect to claim the 50% year one allowance in whole or in part at any time over the seven year writing down period, subject to a cap of €31,750 on the amount which can be written down in any one year. The remaining expenditure is claimed as normal at 15% for the first six years and 10% in the final year of the writing down period. Farmers elect which of the two types of writing down arrangement they wish to avail of when they first make a claim for this relief.
I consider that this relief is already very generous in scope. However, as is customary, I can make no further comment on the intention or otherwise to make changes in taxation in the lead up to the annual budget and Finance Bill.