Wednesday 08 July, 2015
Farming Tax Relief
From April 2016, self-employed farmers will be able to average their profits for tax purposes over five years rather than the current two years. This change in income tax has been welcomed by the farming community and will assist farmers when dealing with wide fluctuations in profits that are frequently related to factors out of their control in an era of price volatility.
This change only applies to individuals and members of partnerships, not farming companies, and a consultation will be held later in 2015 to determine the detail of the new relief.
Today’s announcement was a welcome surprise as no detail of this income tax change had been leaked in the few days before the budget or announced in the Autumn Statement.
Annual Investment Allowance
By contrast, the speculation surrounding the Annual Investment Allowance (AIA), currently at £500,000 but set to drop to the fall-back position of £25,000 beyond December 2015, initiated little change in the 2015 budget, other than some minor anti avoidance provisions.
However, the Chancellor did allude to the current £500,000 AIA and indicated that the fall-back position of £25,000 is thought to be too low, raising expectations that it will be revised upwards in the Autumn Statement or the next Budget.
These changes are being welcomed by farmers and will go some way towards helping farmers to operate more effectively, being less affected by poor harvests and other set-backs and potentially more able to invest in capital equipment over the foreseeable future.
Hope of lifting of trade barriers to China
Along with the recent successful visit by Chinese Government Inspectors as part of a project run by the AHDB Cereals and Oilseeds Exports team to remove trade barriers to supply barley to China, these budget changes are good news for the farming community.
Maybe after farming profits being in decline for the past
few seasons and low optimism for 2015 profit margins, cereal farmers in the UK
can once again see a glimmer of hope for the future?
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