Farmers to Sway General Election?

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As a farmer, it appears that the three main political groups are out to get your vote.

The Conservatives, Labour and the Liberal Democrats have all recently released their manifestos including a multitude of pledges which will affect farmers across the country. One thing that all three agree on is that Brexit will have a massive impact upon farming businesses.

The Conservatives say they have “huge ambitions for the farming industry. We are determined to grow more, sell more and export more great British food”.

Labour feel that they are the only party that will “prioritise a sustainable, long-term future for farming, fishing and food industries”.

The Liberal Democrats highlight the importance of a strong deal by suggesting that a bad Brexit deal will “turn Britain into a regressive, isolated and inconsequential nation.”

With just over two weeks until Britain will take to the polls, which of the parties will be best equipped to take the country through Brexit with the strongest deals in place remains to be seen. However with them all fighting for your vote, farmers may yet have a big say in the outcome of the general election on 8 June.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Will Brexit Affect the Value of Your Farmland?

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Fears have been expressed by some land agents that agricultural land prices may fall in the UK, as a direct result of Brexit.

It is expected that the amount of subsidies, such as the Basic Payment Scheme, will decline once Britain leaves the EU, causing some farmers to re-consider their financial position.  Many are already struggling to make ends meet and a reduction in subsidy support, combined with a predicted interest-rate rise for borrowing, may result in many being forced to leave the industry.

As a consequence the demand for farmland could fall away, with the price per hectare dropping by as much as £1,000, despite it having remained fairly robust so far, at an average of around £7,500 for bare land.

However, even the experts admit it is difficult to predict the full impact of Brexit, with so many other factors coming into play, such as trade tariffs, pricing and food imports.  Post-referendum predictions of economic doom and gloom have not yet come to pass, so those in the industry would be wise not to panic at this stage.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Accommodation For Agricultural Workers

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Farmers who provide accommodation to their employees need to make sure that the rates they charge their workers do not push wages below National Minimum Wage or Agricultural Minimum Wage.

If accommodation is provided to workers, the offset rate as provided by HMRC is £6.40 per day or £44.80 per week from April 2017.

If an employer charges the employee more than the offset rate, the difference is taken off the employee’s pay which will lower their wage and it could fall below minimum wage.

If the accommodation is free, the offset rate is added to the employee’s pay increasing their wage.

However, charging below the offset rate will have no effect on the pay.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

The General Election: What Will It Mean For Farmers?

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Following the announcement by Theresa May that there will be a general election in June, industry leaders in the food and farming sectors have called for all political parties to put agriculture at the fore-front of their policies.

The Food and Drink Federation in particular are asking all concerned to make clear their vision for food and farming post-Brexit.  It is important, says the Federation, that any future Government is focused on promoting growth and support in the agricultural sector, delivering a good deal for farmers to be competitive enough to make a substantial contribution to the UK economy.  With international relationships currently under immense pressure, now is the time for the country to look at how we can become more self-sufficient, particularly when it comes to feeding the population.

The Tenant Farmers Association have also delivered a list of priorities which they believe are crucial to ensure our farming industry flourishes as it should.  They include reducing the country’s reliance on imports, highlighting animal welfare and consumer safety and confidence, help with price volatility and long-term security for tenant farmers.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Window for New Farm Business Grant Soon to Open

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Wales Rural Development Program have released the dates for the expression of interest in the new Farm Business Grant Scheme. The window will open on 2nd May and will close 30th June.

The Farm Business Grant Scheme will offer grants of between £3,000 and £12,000 to the successful applicants, in a bid to improve the farmer’s performance in Wales, and provides up to 40% funding towards investments in capital and machinery that have a clear and significant benefit to the farm.

The key areas for investments are cattle, sheep and pig equipment, crop management equipment, energy efficiency and many more.

There are conditions for those looking to apply which, along with more information, can be found here.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

HMRC Agricultural Compliance Checks

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In the rural sector, employers are being urged to check that they are paying the correct minimum wages rates where both the Agricultural Minimum Wage and the National Living Wage apply.  HMRC has launched a programme of compliance checks to ensure the correct rates are being paid and can ask to see any associated records.   This applies to workers in horticulture, agriculture and could include other areas such as, for example, beaters, housekeepers, temporary staff and casual labour.

The Rules

Wales – Agricultural workers must be paid the higher of the Agricultural Minimum Wage or National Minimum Wage

England – Agricultural workers must be paid at least National Minimum Wage unless they signed a contract before 1 October 2013 which entitles them to Agricultural Minimum Wage.

Agricultural Minimum Wage is dependent upon the employee’s job grade and category. Further information can be found on the HMRC website.

Exemptions

Family members who live at the home of the employer and help out with chores or participate in the running of the family business do not qualify for the minimum wage.

However, if your business is a limited company this is a separate legal entity and cannot be considered to have a family or a family home so the minimum wage rules still apply to all employees.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

24 Hours In Farming

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From 5am on 10 August to 5am on 11 August 2017, “24 hours in Farming” is back supported by FG Insight and Morrisons.  The aim of the event is for UK Agriculture to “shout about the industry and why they are so proud to work within it” and to show consumers how much passion and commitment goes into producing the food they eat.  Last year the event reached an audience of 112 million and trended in the Top 5 on Twitter all day.

You can get involved by posting photos and videos on any social media platform using the hashtag #Farm24 to let people know what you are doing that day.  This year, the event organisers are trying to make it bigger and better than last year by encouraging farmers to also host on-farm events, give talks to local groups or arrange interviews with local newspapers or radio stations.

If you are planning on opening your doors to the public, you can click this link to find a quick guide on how to get organised.

Are you a farmer or a landlord?

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There has always been uncertainty over whether a landowner is a farmer or a landlord for tax purposes. There has however, been a recent useful decision by the First Tier Tribunal in the case of John Carlisle Allen which has helped to clarify the capital gains tax position (and the valuable entrepreneurs relief/rollover relief ) on grass letting, and what constitutes trading or investment activities by the landowner.

The facts of the case are:

  • Mr Allen and his brother grew the grass which was eaten mainly by Mr Crooks’ stock.
  • The Allens maintained the rights to lairage – temporary housing of animals on the land, supplied fertiliser when needed, maintained fences and drainage, supplied water and engaged a Contractor to cut the weed and hedges.
  • Mr Crooks could graze stock or take silage off between 17 March and 1 November and claim the subsidy for part of the time. He was not permitted to spread artificial fertiliser on the land, only farmyard manure. He had to control his stock and repair any damage caused by them.
  • The Allens occasionally supplied fertiliser free when the grass was getting weak, but this did not happen every season.
  • The ground was left to recover over the winter for fear of poaching.
  • The £1,000 paid a year was described in the agreement as a “licence fee” rather than rent.

The Judge found in favour of the taxpayer. He stated that the Allens had demonstrated an awareness of the land and its condition and the need to maintain it. The actions were not one of a property investor. Although Mr Crooks was taking the grass, it was the Allens who were farming the land by managing it in such a way as to maximise the grass crop produced and maintain its quality. Their input into the husbandry of the land was critical.

So what can landowners take from this case if they wish to be classed as a farmer rather than a landowner?

  • Keep a diary or record of what you do from day to day, month by month.
  • Keep clear detailed notes to record the work undertaken and management carried out.
  • Carry out soil testing every few years, and take advice on applying the right quantities of lime, phosphate etc., to correct soil deficiencies, minimise wastage and maximise the crop.
  • Carry out weed control.

There are, as stated above, valuable capital gains tax reliefs which apply to a trade but not to the letting of land. Make sure you are in a position to utilise them if needed.

For further information please contact the tax team at Green & Co on 01633 871122.

Another Welsh Council Joins Chinese Lantern Ban

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Farmers in South East Wales will be relieved to hear that Torfaen has now joined the list of councils in Wales to ban Chinese Lanterns. The paper lanterns have become increasingly popular over the last 10 years and are often released into the night skies to mark a celebration or commemorate a special event.

Working on the same principle as a hot-air balloon, the lantern carries a small quantity of propellant which, when ignited, forces it up into the air where it travels until the paper is all burnt away.  Whilst they make quite a breath-taking spectacle when released en masse, they have become a nightmare for farmers and other livestock owners.

Once the lantern itself has been consumed, the wire framework falls to earth and there have been numerous incidents of cattle ingesting the small wires where the debris has landed where they graze.  The wires are like fine needles and difficult to spot and as they cannot be seen going through cropping machines, they can also end up in cattle feed, causing severe injuries to livestock.

Fragments of the burning lanterns can also break away, and there have been occasions where they have landed on hay barns, with potentially disastrous consequences.  Some farmers have even been forced to carry out routine patrols to look out for lanterns being released.

Wildlife is also affected with many birds and smaller animals become entangled or injured by the lanterns, and RSPCA Cymru has been campaigning for several years against their use.  They are now calling on the Welsh Government to make people more aware of the damage caused and so help to bring a nationwide ban a step nearer.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Reminder for those claiming under Glastir Small Grants Scheme

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Participants under the Carbon theme of Glastir Small Grants Scheme have until 31st March 2017 to complete works and submit their claims online.

Claims need to be submitted via the Rural Payments Wales (RPW) Online facility. Geotagged photographs will be used to validate the claim showing the project location before the commencement and after completion of the Works.

Further information is available on the Welsh Government website here.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.