17 March, 2016
Headline points from the 2016 Budget for the rural economy and property. Get out of sugar, get into tunnelling, run a micro-business on the side, infrastructure needs you, take your capital gains now, incorporation is looking better and better unless you intend to sell your professional services to the public sector, drink whisky and beer not wine. Despite this, old age and death are beginning to look expensive.
A £3.5 bn reduction in public expenditure is not intended to dent George Osborne’s claim that, “We [ie the Conservative Government] are the builders”. Practically this means Read the rest of this entry »
5 January, 2016
The government is seeking evidence on the taxation of employer provided living accommodation. An explanatory document has been issued and the deadline for responses is 3 February. It is worth reading for its clear explanation and examples of just how complicated the taxation of employer provided living accommodation has become over the last forty years or so. It can be found at this link: Government consultation on employer provided living accommodation.
One particular question of the 16 caught my attention. It’s number 10, and it asks:
Do you agree that using market rental value would provide a simplification to the tax rules on provided living accommodation? How could such a system work and what would be the impacts on both employers and employees?
I wonder what the effect of this might be on rural employees who live in houses which might be considerably larger or more expensive than they would otherwise choose, or indeed than they may be able to afford? I have devised a simple survey which will allow some data to be collated if we can gather enough responses. Some of the questions ask how many people of different ages live in the accommodation. This will allow comparison with the maximum size of accommodation that would be acceptable for Local Housing Allowance purposes. Please complete the survey by the end of January and this will allow the responses to be collated in time for the government’s deadline.
This link: Accommodation Survey will take you to the survey. Thank you for your help which could be most valuable in providing evidence for the government’s review.
14 December, 2015
Rural Business and Farm Tax Update – Autumn Budget to Spring Statement
Web class Online, 15 Dec 2015
The Autumn Statement was delivered by Chancellor George Osborne on 3 December this year. This web class will be delivered two weeks after the Chancellor has published the government’s review of the economy, on Tuesday 15 December, 09.00 to 10.30 GMT
It provides an excellent opportunity to look forward to what we can expect in the 2015 Spring Budget, and to take stock of any important tax planning opportunities which should not be missed before the end of the tax year in April. In recent years the Autumn Statement has become just as important as the Budget itself, sometimes containing far more important statements concerning taxation, tax rates and the general thrust of economic policy.
Follow this link for further details. Or go to this url:
- Evaluate the impact of the Autumn Statement on farm businesses and the business structures associated with them
- Evaluate the impact of the Autumn Statement on rural estates and related enterprises
- Apply the latest rates and rules for the assessment of Income Tax, Capital Gains Tax and Inheritance Tax
- Advise on the wider economic and financial implications of current tax policy for rural estate and farm business management.
Who Should Attend
- Estate Managers
- Rural and agricultural valuers
- Farm business consultants
- Anybody whose livelihood is affected by the workings of the UK tax system.
Web Class Pre-requisites
Some familiarity with Income Tax, Capital Gains Tax, Inheritance Tax and VAT will be helpful, as well as some of the other taxes which can affect land transactions eg SDLT.
20 October, 2015
Jeremy Moody, Secretary and National Adviser to the Central Association of Agricultural Valuers, spoke at Harper Adams University on Thursday 15th October on ‘Agriculture: Five Great Challenges’.
Opening with the observation that necessity is the mother of invention Jeremy commented that farming only adapts when it has to do so.
Jeremy identified his five great challenges as:
- Volatility. Farming’s response so far has been to spread unit costs by taking on more land. Attempts have been made to spread risks as well, but farming risks are increasingly connected. Cost leadership is the answer, but ‘costs are like daisies’ – you cut them down and they grow up again. Some farmers have responded effectively by moving further down the supply chain, for example the potato grower who now supplies chips to take aways.
- Output/acre ~ value/acre: We are generally growing low value commodity crops and with this we are seeing an inexorable shift to domination by combinable crops, wheat in particular. The number of potato growers is predicted to drop from 2,000 to 1,000 over 10 years. On the other hand, high value output enterprises are starting to appear. For example vineyards in the south of England, and orchards.
- Resources: capital has been readily available at very modest cost, but the rising challenge will be the repayment of the capital itself rather than the servicing charges. There are 60,000 farms which keep only one person in work. Employed labour is concentrated in the pig, poultry, horticulture and dairy sectors and many of these employees come from abroad. There are gaps in the age structure of farmers and it will be a continuing challenge to recruit and retain skilled labour. Foreign workers are no longer confined to handwork in the fields but are steadily moving up the value chain – without its input we would not be able to sustain much of the higher value cropping leaving farmers with little choice but to revert to monocultural wheat. Soil health and the resilience of natural capital is also a key part of the resource challenge. We need to be able to put the right values on the health of soil. This also draws in the value of water, and abstraction rights for irrigation in particular.
- Science and productivity: There has not been much growth in productivity since the 1980’s yet we know that precision farming can increase yields. There needs to be spare capacity in management in order to make time to consider the possibilities and implement new approaches. Our increasing reliance on data raises questions about its ownership, for example at the end of tenancies, from one farmer to another, from contractor to farmer. Actually making effective use of all the data and technology now at the farmer’s disposal is also a large part of this challenge. Modern machines have enormous technical capacity, but in practice little of what is available might actually be used.
- Progression: Flexibility must be the watchword in considering progression. New entrants need not be young. Sideways entrants from other sectors can bring just as much and more. The wonderful smallholding opportunity for the 25 year old can be prison for the same 40 year old. The industry is dominated by family businesses, 90% of farm employers and 30% can trace their farming origins to before 1900. Increasingly we may see 90 year olds leaving farms to 70 year olds.
We cannot be the world’s cheapest producers, it is therefore essential that we focus on high input and high output farming with a long term view to ensuring the health of the basic resources on which farming and much else depends.
What do you think of Jeremy’s Five Challenges for Farming? Here’s the video if you would like to see more:
Source: Agriculture: Five Great Challenges by Jeremy Moody
This video was filmed at Harper Adams University on 15 October 2015 in front of a live audience of students and staff in the Weston Lecture Theatre
18 October, 2015
This year’s edition of Concise Rural Taxation is now available. See the tab for further details of this year’s content, how to order and price (held at the same level as last year).