Land, of any sort, is difficult to value. As accountants we are often required to value assets of one sort or another, and various tools have been developed to do so. However, none of these tools is particularly helpful when we look at agricultural land. Rental yield, when you take out some management costs, is miniscule, and there are many uncertainties, of which Brexit is only one.Read More
Most landowners know exactly what the family owns, including the finer details of boundaries, tenancies and history. However, they may be less clear about exactly who owns which property and what’s on the business balance sheet. It’s not uncommon for someone to think they own land when in fact it’s still held in the names of grandparents’ executors, or for them to think it’s owned jointly with a spouse when that’s not the case.Read More
The annual government report on agriculture has recently been issued. At 110 pages it is not easy reading, but it certainly sheds light on an industry which we, as accountants, normally only observe on a piecemeal basis.
Five interesting things
The average age of farmers rose from 56 to 59 between 2000 and 2013.Read More
Now that we are in the new financial year it is perhaps a good time to consider the financial state of the agricultural industry in the UK. “Fragile” is a good word to start the assessment. Commodity prices have picked up over the last six months, but much of this is simply a currency movement following the Brexit vote and even so there is still relatively little margin when wheat stands at under £140 for harvest.Read More
Running a Bed & Breakfast business from your farmhouse can introduce some diversified income into the family and make use of some unused bedrooms.
Such an enterprise can also be tax-efficient. A farmhouse Bed & Breakfast business qualifies for the rent-a-room allowance, which has increased to £7,500 per annum from 6 April 2016.Read More
With commodity prices fluctuating wildly in recent years, profits (and hence tax liabilities) can also fluctuate from one year to the next. Given the HMRC payment on account system, this can mean that your tax bill is higher than necessary.
Payments on account are calculated as 50% of the prior year’s tax bill, with one payment due by 31 January of the tax year, and the other payment due by 31 July after the end of the tax year.Read More
Mark Grimshaw, the chief executive of the Rural Payments Agency (RPA), recently presented to the Tenant Farmers Association Recommended Professionals Meeting in London. One of the main items on the agenda was the progress of 2016 Basic Payment Scheme receipts and I have summarised some of the discussions below.Read More
Major changes are being made to the way in which all taxpayers interact with HM Revenue and Customs (HMRC). The Government is referring to these changes as “Making Tax Digital” and they are proposing a staged introduction to the new rules, starting for many in April 2018.
The proposals are wide-ranging, but one of the biggest changes planned is an electronic quarterly report to HMRC of income and expenditure.Read More
The UK’s choice to leave the European Union has both short and long term implications for British farmers and landowners.
Since the referendum result was announced in June, the pound has fallen significantly. This has facilitated an increase in crop prices, which – whilst still below the cost of production for many farms – will provide a welcome cash boost for any farmers with unsold produce from the 2016 harvest.Read More
With lower crop prices in recent years, it will come as a gentle relief that the payments due to farmers from the 2016 Basic Payment Scheme (BPS) will increase by 16.54% when compared to the 2015 scheme monies received.
In brief, this has resulted from a favourable euro to pound exchange rate, being used by the Rural Payments Agency (RPA) for calculating BPS amounts due to those farmers choosing to be paid in sterling.Read More