Green budget, great opportunities for farmers
22/03/07

The NFU scored some wins in this year’s budget from Gordon Brown but farmers were stung with an increase in car tax for band G vehicles. With many using 4x4 vehicles for essential farm work, the NFU will be calling on Government to find a way forward to preserve the legitimate use of working vehicles.

The Vehicle Excise Duty for band G will see an increase from £210-230 to £300 this year and a further £100 increase to £400 by next year. Only vehicles registered from March 2006 are included, so NFU members with older 4x4s will not be affected.

NFU President Peter Kendall said: “Although I understand the principle, some of the vehicles affected by the tax increase are essential to work within the agricultural industry and I will be pressing Government to recognise the important and legitimate use of off-road vehicles.”

The good news included the duty rebate for biofuels being retained at 20p per litre until 2010 and a two per cent discount in the percentage of the list price used in calculating the taxable benefit for company cars running on E85 ethanol, which was called for by the NFU.

The 11th budget delivered by the Chancellor also recognised the importance of good information and incentives as the primary tool to address environmental challenges. Farmers will be able to take advantage of extra spending for science and technology with emphasis on environmental transport, VAT rebates on energy saving equipment and increased emphasis on environmental capital investment.

There will be further incentives for development of the biofuel industry and links with other countries around the world to ensure biofuels are produced in an environmentally sustainable way.

Energy efficient homes will also see tax relief, with carbon neutral housing receiving exemption from or reduced stamp duty. Together with the announcement of additional Low Carbon Buildings Programme funding, this will give extra incentives to encourage the market for farmers to provide wood fuel for rural homes. In real terms, a carbon neutral home worth £300,000 would receive a tax break of around £9,000 – more than enough to install biomass heating.

Mr Kendall said: “This budget aims to prepare the country for the environmental challenges that lie ahead. Farmers and growers are ready and able to offer solutions to these problems. I agree with the Chancellor that these solutions need to be delivered through good information and incentives if they are going to be effective.”

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