Accommodation For Agricultural Workers

accommodation for agricultural workers.jpg

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?

general election what will it mean for farmers.jpg

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

Window for New Farm Business Grant Soon to Open.jpg

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.

Welsh Pigs Bringing Home The Bacon

Welsh Pigs.jpg

Pork from traditionally reared Pedigree Welsh Pigs has been awarded special status from the European Commission. Becoming the first of its kind in Wales, the pork has been granted Traditional Specialities Guaranteed (TSG) status.

The new status means that pedigree Welsh pork can be produced anywhere in Europe, as long as the animals are pedigree and registered with the British Pig Association or similar.

Producers that use the TSG designation are encouraged to join the Pedigree Welsh Pig Society, who can offer help and support and help ensure that the traditional methods and high standards are kept.

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

Big UK interest in Dairy Aid scheme

Big UK interest in Dairy Aid scheme.jpg

The Rural Payments Agency has revealed that over 1,800 UK farmers have applied for the EU’s Dairy Aid Scheme.

The voluntary scheme will pay producers the equivalent of 12.2p per litre to cut production over the next three months. The aim of the scheme is to reduce the milk supply across Europe and restore balance to the market which will in turn stabilise prices.

Over the course of the coming week, the EU Commission will verify figures from all member states and work out the funding to cover all the applicants for the scheme which will run from 1 October to 31st December.

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

 

Anaerobic Digestion – Leaving You Short Of Breath

Biogas plant with Cows

The UK’s biogas sector faces an uncertain future following the latest report from The National Non-Food Crops Centre.

Past and current growth rates in the sector look set to plateau around late 2017. This will inevitably bring with it increased investor uncertainty and reduced backing from government groups.

Statistics show over 450 sites are in the development phase at the moment, with predictions indicating that just over 50% of these will be successfully built and become fully operational.

There is of course still potential for sites to go ahead and be built albeit behind schedule, but planning for new sites has taken a dramatic hit with around 50% fewer sites making it past the planning stage in the last year.

Growth is the problem

 Rather ironically, the substantial growth in the sector is what is creating its demise, as investors were speedily getting multiple plants through the planning stage in order to gain incentives such as the Feed-in-tariff (FIT’s) and Renewable heat incentives (RHI).

As a result, the quarterly caps set on these schemes are being hit significantly ahead of schedule, therefore triggering cuts in the prospective quarters as the government looks to decrease its investment in the sector.

Whilst ongoing research is conducted and final papers are due on the FIT’s rates moving forward, it seems that it may be too little too late for this sector in the EU.

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

 

 

The Farmhouse – Not Just Where The Farmer Lives!

Traditional farmhouse in the North York Moors, Yorkshire, UK.

They say an Englishman’s home is his castle, but in the case of a farmer, his home is usually more of a business centre.

The Farmhouse is an essential part of any farm operation, serving as an office, a store, a boardroom, a make-shift veterinary clinic as well as a works canteen and restroom.  As a result HMRC acknowledge the uniqueness of the nature of a farmer’s expenditure in maintaining his home, and accepts a portion can be claimed as allowable business costs.

Normal practice is to include the full amount of the premises costs (such as council tax, water, light and heat, insurance and repairs) in a farmer’s accounts, with a portion added back in the tax computation.  This would, generally speaking, be between three quarters and two thirds. The amount can be agreed between the farmer and his accountant, and is dependent on lifestyle and farm activity, but it is unusual for HMRC to challenge a private use adjustment in this range.

The same principle applies to claiming input VAT on farmhouse expenditure, with an agreed portion being excluded from the relevant claim.  This can be a little more complicated as it can be difficult to justify restricting the same amount on, say, a repair to a bedroom as on repairs to the roof.

Where there is a partnership, with one or more partner occupying separate farmhouses, it can be difficult to argue that both act as business centres for the farm.  However, where the farm is a large concern or there are several enterprises operated by the partnership, a claim for expenditure on more than one farmhouse could be justified.  Again this is something the partners would need to discuss with their accountant.

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

Protecting Your Farm With A Power Of Attorney

Law, rights, closeup.

Incapacity can have a devastating effect on the viability of a farming business, if it is the main decision-maker who becomes ill.   This is particularly true if they are diagnosed with dementia or a similar mental illness. However, you can ensure your farm will continue to run smoothly if you do become ill, by setting up a financial power of attorney.

A financial lasting power of attorney allows you to appoint anyone you trust to deal with your financial affairs should you become incapable of doing so yourself.  They will have access to your business bank account and have the power to pay bills, order supplies, arrange contracts, buy machinery and generally take charge of running the farm, so that it remains a viable business – an essential if you want to pass it on to the next generation.

An attorney can be a family member, a trusted associate, or both, and you can specify when and what powers each can invoke on your behalf. Powers of attorney must be set up by an appropriate legal professional and it is a good idea to also consult your financial advisor/accountant to make sure your wishes are transparent and your instructions sound.

If you don’t wish to grant a lasting power of attorney just yet, and you are still capable of decision making, you can set up an ordinary power of attorney in the meantime.  This allows the attorney to act on your behalf, but with your supervision, and is a good way of keeping an eye on how they might cope with a lasting power in the future.

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

Water Abstraction License Reforms

Tomato Water

Both Defra and the Welsh Government have announced plans to abolish Water Abstraction Licences and replace them with Water Abstraction Permits in the early 2020’s.The current licencing system was initially set up in the 1960’s and has been described as not flexible or modern enough to cope with the needs of various stakeholders, such as the environment, farming, climate change and the needs of an increasing population.

The reform aims to provide those who need to abstract water with an allocated volume based on the amounts used over the past decade during peak times.

With this comes the proposed abolition of ‘section 57’ which restricts the use of spray irrigation during droughts. Although this will be welcomed by most, it is likely that other regulations will come into force during times of low river flow.

There are many factors concerning the transition between the two systems which include calls for possible tax incentives for farmers who build reservoirs to store surplus water, as well as the new permit system to be introduced at a pace which allows farmers to adjust their irrigation strategy.

Both the security and certainty of water for food production is a key concern along with the regulation of pre-approved trading within water catchments.

There may be some variations between Defra and the Welsh Government’s proposals which should be taken into consideration, once further information has been released.

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

Good News For Farmhouses In Flood-Risk Areas

rain drops background

Some farmers in high-risk flood areas may be able to insure their farmhouses under the new Flood Re scheme.

The scheme has been set up jointly by the Government and the insurance sector to help those whose homes are at greater risk of flood damage. Homeowners will be able to insure their properties as normal with the flood risk element being covered by the Flood Re scheme. This will hopefully make premiums more affordable and insurance companies less nervous about offering cover.

Whilst commercial and agricultural buildings are not covered by the scheme, farmhouses can be included provided they meet certain criteria, mainly that their council tax is within bands A to H and that the property is in the name of an individual, rather than a partnership or business.

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