The ‘End of The season of Goodwill’ for Farmers?

06 January 2016

Having recently been immersed in “the season of Goodwill & Peace to all men” - on the basis of the recent announcements from the Treasury, the goodwill doesn’t appear to have been extended  to the farming community!

In the Autumn Statement we saw the acceleration of Capital Gains Tax on some property sales which will impact on any disposals of farm cottages. There was also the outline for a system of quarterly online accounting by businesses in future. This will be introduced by 2020 and there will be a consultation on “options to simplify the payment of taxes, including whether to align payment dates…”  The cynical amongst us may interpret that as being a decision to accelerate the payment of tax by the self-employed to help fill some of the gaps in the Treasury coffers.

We have also seen a worrying attack on the ability of farm businesses to relieve farming tax losses against other income such as pensions or rents. There has for many years been a “hobby farming” restriction but four cases on this point have been taken to tribunal over the last twelve months, each testing different aspects of the legislation. This will not only affect small scale enterprises: a contractor with a smaller in-hand enterprise which is effectively subsidised by the contracting could also be caught.

Finally, on 14th December another consultation was issued looking at “employer -provided living accommodation”. This will include tied cottages and is intended to help the government discover “how well understood the rules are, and to what extent they are still relevant today”. Again this looks rather like an attack on a relatively small but important relief for the agricultural sector. 

So it there ANY good news? Yes. The one useful announcement in the Autumn Statement was that the Annual Investment Allowance will be set permanently (until the next Chancellor decides to change it)  at £200,000 – so whatever else goes wrong, at least the vital capital expenditure budgets for the next few years can be projected with some degree of certainty – so for that, Mr Osbourne, thank you.

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