Farmers should assess finances now to make use of the new Countryside Productivity grant to boost efficiencies and improve production, advises Old Mill.

The Rural Development Programme for England launched the latest grant scheme for farmers last week. The Countryside Productivity small grant scheme allows farmers from both livestock and arable sectors to claim up to 40% towards new equipment or technology.

Mark Seager, rural services accountant at Old Mill said: “Improving precision and productivity, as well as embracing innovation, will help in uncertain times but it’s worth keeping the tax implications in mind.

“The main thing to be aware of is that applications close on 14 March. Ultimately, we are coming up to the March year end and people are starting to look at tax planning in order to utilise their annual investment allowance.

“If you’re looking to become more efficient and productive, it makes sense to apply for the grant but take into account the minimum grant of £3,000 and maximum of £12,000.”

The scheme allows for a grant of up to 40% of a purchase, so any purchases above £30,000 will not get more than £12,000 towards them.

It is unlikely that an application would get approved and processed in time for the end of this tax year so it may not be an option to work it into the 2017/18 annual investment allowance.

It might be the case that the current investment plan for the 2018/19 tax year has made use of all of your annual investment allowance of £200,000.

Mr Seager said: “If this is the case, look at whether anything can be brought forward before year end, or deferred to the following financial year to make use of the grant in your 2018/19 allowance.

“There’s also no point applying unless you have the cash available to make the purchases – so don’t do it just for the sake of having a grant, especially if it means tying up cash when you don’t need the equipment."

If planning to invest, it’s sensible to do a 10-month set of management accounts to look at profitability at the end of the period and estimate the projection for the following two months. This way farmers are prepared for how any purchases could benefit the business.