Accelerated capital allowances for safety equipment delayed

The move is to ensure compliance with EU State Aid rules

Sat, 29 May, 2021 - 11:00

Kieran Coughlan

If you are wondering what happened to the accelerated capital allowances for farm safety equipment which the Government announced at the end of November, Finance Minister Paschal Donohoe revealed last week the measure is still subject to a commencement order to allow for ensuring compliance with EU State Aid rules and for various operational aspects of the scheme to be developed and put in place.

“The work to achieve this is currently being undertaken by my Department, the Department of Agriculture, Food and the Marine, and Revenue.”

“Notwithstanding this, as the scheme is one that will take into account expenditure across a full year, the expectation is that, once the relevant provision is commenced, relief will be available for relevant expenditure incurred in the current year.”

The Finance Act 2020 introduced the new legislation to allow for accelerated capital allowances to be claimed in respect of certain items of farm equipment which support farm health and safety.

The scheme grants allowances at a rate of 50% over two years, meaning the cost of such equipment could be written off against farm profits over a two-year period rather than the usual eight -year period.

A list of the type of equipment which can qualify is as follows:

Hydraulic linkage arms mounted tractor jacking systems;
Big bag (equal to or greater than 500kg) lifter, with or without integral bag cutting system;
Chemical storage cabinets;
Animal anti-backing gate for use in cattle crush or race;
Quick hitch mechanism for rear and front three-point linkage to enable hitching of implements without needing to descend from the tractor;
Provision of access lift, hoist or integrated ramp to farm vehicle, including modified entry when required;
Wheelchair restraints/wheelchair docking station;
Modified controls to enable full hand operation of a farm vehicle;
Modified seating to enable operation of a farm vehicle;
Additional steps to a farm vehicle or machinery to provide easier access;
Modified farm vehicle or machinery controls to enable control by hand or foot;
Hydraulically located lower three-point linkage arms.

To qualify for the accelerated allowances, a farmer must make an application to the Department of Agriculture for approval, and where such approval is granted, a qualifying certificate will be issued.

An overall budget cap of €5m is applied per annum, and €500,000 per applicant.

The legislation, although enacted, has yet to commence, as the Ministerial Order giving effect to the legislation has not yet been issued pending EU State Aid approval, etc.

Once the Ministerial Order giving effect to the legislation is published, it is expected that application forms will become available.

Other supports are also available for certain safety equipment in the Department of Agriculture’s TAMS grant scheme, such as retrofitting safety cages under roof lights, replacement of swinging doors with sliding or roller doors, installation of calving gates, replacement of slats, etc.

When it comes to farm safety, the improvement of your working environment for yourself and farm visitors is of itself an incentive, but the fact that such expenditure might qualify for an accelerated income tax write-off, or grant aid, gives an extra incentive to get things right.