Autumn Statement – what does it mean for farmers?

For our farming clients, this budget has highlighted the need for us to be in regular contact and be as proactive as possible in respect of profit and expenditure planning, pension planning and general structuring of businesses.

The reduction to the additional rate threshold will not in itself ‘cost’ significant tax, with those earning £150,000 or more paying £1,200 more in tax each year.

However, it does demonstrate the importance of planning your capital expenditure in line with profitable years and also considering whether you need to reassess your overall business structure. For example, if you find yourself being taxed on partnership or sole trader income at these levels but a significant proportion of your profit is being reinvested in the business, you may wish to consider introducing a corporate structure into the mix. We do always have Farmer’s Averaging to fall back on in this respect too.

The freeze on personal allowances, higher rate thresholds, NI thresholds and inheritance tax threshold will clearly impact everyone equally, however, for our farming families, the freeze on the IHT threshold can really bite.

With the values of land increasing and encouragement to remove land from agriculture for various biodiversity net gain or carbon capturing schemes, reviewing your IHT position is more important now than ever. Is your farm safe to pass down a generation without incurring a large liability that will saddle them with debt? Is your current ownership structure correct? What is your succession plan?

Those farms already with corporate structures need to be aware of the planned rise to Corporation Tax to 25%, planning your cashflow projections will be key to ensuring you don’t feel this too significantly. Also, those undertaking R&D activities need to understand they may not get as much relief as initially thought, although this will be case by case dependant.

Finally, with the government committing a further £79million over 5 years in allocating additional staff to tackle tax compliance risks among wealthy taxpayers, getting your accounts, tax reporting and overall plan right is vital.

Find out more

For further guidance on any of the tax measures discussed in this article, please get in touch.

Read the latest tax commentary – visit our dedicated hub where we will be providing resources, advice and practical guidance on what these emergency tax measures mean for you and your business, to help you prepare and manage their impact.