A Farmer’s Life – Through Rose-Coloured Glasses?

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A recent study by The Prince’s Countryside Fund (PCF) has suggested that the public’s view of the life of today’s farmers is a long way from the truth.

Around 25% of those adults who took part in the study said that they found the idea of giving up their day jobs to go and work on a farm an attractive proposition, having what would appear to be an idealised view of living close to nature and making a comfortable living at the same time. When asked to estimate the annual wage of a farmer, the average came out at just over £46,000 pa, with some even guessing at £75,000. A far cry from Defra’s calculated average of around £20,000!

In reality, more than half of farmers today have to supplement their incomes by doing other things alongside the traditional farming role; and with so many dairy farms now closed and fewer and fewer young people coming into the industry, the future of farming in the UK sits under a cloud of uncertainty.

The PCF concludes that more needs to be done to educate the public on the daily challenges of those working in agriculture, and to enable a better understanding of what it means to be a farmer in modern-day Britain. Better links between the industry and the consumer, they suggest, can help to create awareness and promote British farm products.

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

 

Apply Now For Tesco Future Farmer Foundation

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The Tesco Future Farmer Foundation is looking for young people in UK & Irish farming who are keen to develop a successful future in agriculture.

Running from 19 June until 29 September 2017, the programme is available for those aged between 20 and 35 from all farming sectors, and aims to help in four particular areas:

  • Business Skills Workshops with leading experts to help get to the grips with the financial, business and life skills needed to succeed.
  • Supply Chain Events including visits to leading food, farming and retail businesses to help build knowledge of supply chains across a host of different sectors.
  • Business Mentors with the skills and experience to help guide you towards your goals.
  • Training Bursary with funding available for further technical or business training.

The aim of the programme is to inspire and develop the next generation of growers and producers and more information, as well as the application form, 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.

Farmers and Banks – a Relationship on the Rocks?

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A recent survey undertaken by YouGov reveals that farming businesses feel that they are not getting sufficient support from their banks.

Over 1,000 small and medium farming businesses took part in the survey, with over 30% stating they would like to see more commitment to the agricultural industry from banks.  One of the biggest concerns was a lack of specialist knowledge to fully comprehend the support the sector requires.  Many also called for greater transparency regarding fees and charges.

As Brexit negotiations continue, there is still considerable apprehension in the farming community about the future of aid and its effect on the industry.  This, coupled with the feeling that banks do not fully understand the particular pressures they are currently facing, suggests that farmers are becoming increasingly frustrated in their relationships with the banking industry.

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

Welsh Government Consultation

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The Welsh Government has recently launched a significant consultation Taking Forward Wales’ Sustainable Management of Natural Resources. It represents a wide-ranging and radical series of ideas in agriculture, designated landscapes, access, water abstraction and drainage, forestry, regulation and more. See the document here.

Rebecca Williams, CLA Cymru Director says, “Land owners, managers and farmers should focus on these proposals, understand their implications and assist us in providing a strong evidence-based response to the Welsh Government.”

As well as presenting a range of very technical issues which will impact on farmers, landowners and foresters, the consultation is seeking views on legislation that may be needed post-Brexit.

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.

Concern For Rural Businesses Over Changes to Business Rates

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The Countryside Alliance has joined rural businesses and local councils in expressing concern over changes to business rates being proposed by the Valuation Office Agency (VOA) and the Government, with Welsh MP, Glynn Davies, even declaring there could be an “uprising” as a consequence of the proposals.

The changes, expected to be implemented in the coming tax year, involve the revaluation of properties, apparently focusing on the size of a premises, regardless of the nature and profitability of the business utilising it.  A spokesperson for the Countryside Alliance has suggested that many smaller rural enterprises who may have enjoyed rate relief in the past could now face significant increases, which could have damaging consequences.

Most likely to be affected are riding schools, kennels, stud farms and vineyards.  A recent report by the Association of Convenience Stores clearly shows that many such businesses provide an “immense social role” and are an integral part of rural life. As such, the negative effect of increases in business rates on rural communities could be substantial.

All concerned parties have called for the VOA and the Government to re-consider their proposals, suggesting rural businesses require extra support rather than becoming “disadvantaged” by the proposed revaluations.

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

Tax Relief for Farmhouse Renovations

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It is very likely that at some point your farmhouse and other buildings used in the farming business will require refurbishment, and it is important to be aware that whereas some repair expenditure can be relieved in the year it’s incurred (subject to a disallowed proportion for private use of buildings), alterations and improvements cannot. This is known as capital expenditure.

Repairs carried out which simply restate the building to its original condition are typically allowable as revenue expenditure. On the contrary the cost of replacing, improving or altering an asset is normally capital expenditure and can be relieved on disposal of the asset.

These rules extend to rental properties and in addition there are rules for rental properties purchased at below market value because they require extensive work in order to be habitable.

‘Capital versus revenue’ expenditure is a highly contentious issue and many cases have gone through the courts because HM Revenue & Customs and the taxpayer have disagreed over the tax treatment.

If you have any queries about taxes and the farming business please contact Green & Co.

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

Greater protection for farmers ahead?

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The government has announced two reviews of the Groceries Code Adjudicator (GCA) which could pave the way for greater protection for farmers in the supply chain.

Set up in 2013, the GCA was created to ensure retailers stuck to fair trade rules, and the first of the reviews will look into how effective the adjudicator has been and how it has used its powers.

The second review will consider whether the scope of the GCA should extend to include indirect suppliers such as farmers. Currently the GCA’s remit excludes the majority or producers and growers, but there is a growing call that there is not enough being done when retailer pressure starts to work its way down the chain.

The two reviews have been delayed since March due to the EU referendum and subsequent changes to government.

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

Your Redundant Farm Building could be Restricting your Inheritance Tax Relief

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Agricultural Property Relief (APR), if obtained, allows an individual to pass on agricultural property, either in their Will or during their lifetime, free of Inheritance Tax (IHT).

Business Property Relief (BPR) reduces the IHT payable on a wider class of qualifying business assets when they are left in a Will or passed on during lifetime.

In order to qualify for APR farm buildings must be occupied for the purposes of agriculture – derelict buildings will not qualify for the relief. Similarly, if the property has not been used wholly or mainly for business purposes in the two years prior to the transfer, BPR will not be secured.

It’s important for all Farmers to consider their exposure to IHT and if farm diversification is currently being pursued, i.e. alternative uses of agricultural land and buildings, then it’s wise to act sooner rather than later.

If you would like further advice on Inheritance Tax please contact Green & Co on 01633 871122.

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

Tax Allowances on the Farm

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Certain plant and machinery can qualify for what’s known as Annual Investment Allowance (AIA), which allows businesses to claim for the cost of the new asset (up the specified threshold) in the year of purchase.

The current Annual Investment Allowance is £200,000 (in the year to 31 December 2015 the limit was £500,000) and it’s expected to stay at that level under the current Government. Plant and machinery that doesn’t qualify for AIAs can have writing down tax allowances of 18% or 8% (current year rates).

HMRC have accepted that silage clamps and slurry pits qualify as plant and machinery, which is of particular importance to farmers due to the Nitrate Vulnerable Zone Legislation.

There are many intricacies within this area of tax so it’s good practice to check with your tax adviser whether new assets or work qualify as plant and machinery in order to maximise AIAs.

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