Budget puts pressure on farm incomes

UFU president Barclay Bell says planned increases to National Insurance contributions for the self-employed will hit farm incomes and have a negative impact on already slim margins.

“The last couple of years have been difficult for many farm businesses. There has been some recovery, but already we see signs of incomes again coming under pressure. What farmers needed were measures to help support productive, progressive and profitable farm businesses, especially as the UK prepares to leave the EU,” said Mr Bell.

The Chancellor did announce that the government will delay its ‘Making Tax Digital’ plans until April 2019, for businesses under the VAT threshold.

Mr Bell said this was welcome news for smaller farm businesses.

He added: “It will give them more time to prepare for digital record keeping and quarterly updates. However, this is of little help to the majority. For some time now, we have sought a practical approach on this issue. We remain concerned about the HMRC’s digital tax plans, which from April 2018 will force onto most farmers a burdensome accounting process. Here in Northern Ireland, this is made all the worse in rural areas by lack of access to quality broadband and patchy mobile coverage.”

NFU Mutual also warned that higher National Insurance contributions will hit farmers, self-employed farm workers and contractors.

“The Chancellor announced that Class 4 National Insurance payments will rise by 1% to 10% next year and a further 1% in 2019,” said Sean McCann, Chartered Financial Planner at leading rural insurer, NFU Mutual.

“This move could signify that over coming years the Treasury will bring self-employed people’s National Insurance contributions up to the level of those paid by employees – currently 12% for basic rate taxpayers.

“This will add a further financial burden to the thousands of farmers, contractors and rural service providers who have self-employed status.”