Farming
The Autumn Budget and the Tax Changes Already in Force
Before the Autumn Budget, farms and businesses should understand the allowance and inheritance-tax changes that are already shaping machinery decisions.
In this article
New PM, new Chancellor, Budget on 28 October. Everyone is asking what might change.
Fewer people have noticed what already has.
Writing-down allowances dropped from 18% to 14% in April. A new 40% first-year allowance came in that sole traders and partnerships can actually use, which most farms could not with full expensing. And since April, owned machinery counts towards the inheritance tax cap on farm and business assets.
This is not tax advice
I am not a tax adviser and I say so in every meeting. Your accountant and solicitor should lead any decision on allowances, succession or estate planning. But I sit between the accountant and the solicitor on a lot of machinery deals, and the finance structure is often the piece nobody has looked at closely enough.
That matters because hire purchase, lease and refinance can each land differently on allowances, on the balance sheet and on the estate. The same machine can have a different financial effect depending on how it is held.
Why the finance structure matters
Hire purchase usually suits businesses that want ownership and capital allowance treatment, subject to their own tax position. Leasing can suit those who want the cost treated more like an operating expense. Refinancing owned machinery can release cash without selling the asset, but it changes the balance-sheet picture and should be considered alongside wider advice.
None of those structures is automatically right. The point is that the structure should be chosen deliberately, not added at the end after the accountant has already been asked to tidy up the consequences.
Why Budget timing matters
With six weeks to Budget day, there is a case for making planned purchases under rules you understand rather than waiting to see whether they change. That does not mean rushing into a weak purchase. It means that if the machine is needed, the price is agreed and the business case works, delay has to earn its keep.
If you are buying this financial year, involve your accountant early, decide whether ownership or rental treatment fits the business, and get the finance quote in the same conversation. A clear structure now is better than a scramble after the Budget.
Buckingham Leasing arranges hire purchase, leasing and refinance for farms and rural businesses. We will not give tax advice, but we will work with your advisers so the finance structure fits the decision you are making.
What to check before you commit
The right answer starts with the farm's own year. A machine that is essential in April may be easiest to pay for after harvest. A livestock business may want a different rhythm again. The finance should follow the income pattern, not the other way round, because the strongest agreement is the one that feels ordinary once the asset is working.
It is also worth separating the price of the machine from the cost of waiting. Repairs, fuel use, contractor bills, missed weather windows and lost capacity can all be more expensive than the monthly payment on properly chosen kit. That does not mean every purchase should go ahead. It means the comparison has to include the real cost of running without it.
How finance should be structured
For most farms, the useful conversation is not simply hire purchase versus lease. It is ownership, VAT timing, seasonal payments, term length, deposit level, part-exchange value and how the agreement sits with tax advice. Those details decide whether the purchase supports cash flow or strains it.
A fixed agreement can give certainty in a year where input prices, grain, milk, stock values and weather all move. The payment becomes one known figure against a set of unknowns. That is often the real value: not just access to the machine, but a calmer way to plan around it.
The Buckingham Leasing view
The Autumn Budget and the Tax Changes Already in Force should be judged on practical use. Does the asset earn, save, reduce risk or open up work that is otherwise out of reach? If it does, the finance can usually be shaped around the season and the asset's working life. If it does not, waiting is not failure; it is good judgement.
Bring us the machine, supplier quote, expected use and timing. We will put clear figures around the options so you and your advisers can decide with facts rather than hunches.
