Potential tax changes could have a very significant impact on local agriculture

​He further explained: “The Chancellor has already confirmed that she will not alter the current income tax, National Insurance or VAT rates.

“However, the freeze on individuals’ tax-free free allowance and the various tax bands is maintained until 2028.

“But in reality this is represents a ‘de facto’ tax rise. If earnings were to keep up with inflation alone over the coming years, they will increasingly breach the £50,000 income threshold that takes them from the 20% tax band up to 40%.”

There are, however, other tax options, which the Chancellor can look at.

“One of these is the full tax relief that can be currently claimed by 40% tax payers on annual contributions made to a private pension plan,” McCaffrey commented.

"It is now being speculated that the Chancellor may decide to reduce the rate of tax relief allowable on these contributions to 20%.

“So, for example, a £10,000 contribution made today to a private pension by a 40% tax payer would be eligible for tax relief to the value of £4,000.

“However, if the envisaged tax changes become reality this figure drops to £2,000 after October 30th.”

According to the Omagh-based accountant a significant number of farmers in Northern Ireland, who do not invest regularly in new machinery, choose to boost their private pension fund as a means of limiting their exposure to tax.

“This option may not be as attractive after October 30th,” he pointed out.

“There is also speculation to the effect that the Chancellor will act to increase the rates of Capital GainsTax.

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“This would have a direct impact on all land and property sales entered into by a farming business throughout the United Kingdom. It would also kick-in when land or property owned is gifted to another person.

“Capital gains tax is payable on the difference in value of the asset between the time of its initial acquisition and its subsequent sale or transfer.

“The amount of tax to be paid is based on an agreed market value for the asset. If there is a dispute, where this matter is concerned, Customs and Excise will instruct the Valuation Service, whose final assessment will be binding. Either party involved in the transaction can pay the tax outstanding."

McCaffrey added: “Any increase in capital gains tax introduced by the Chancellor will have a direct impact on a significant number farming businesses across Northern Ireland.”

He concluded: “October 30th is shaping up to be an important day, where a number of tax-related matters

are concerned.

“I would strongly advise farmers to get up-to-date advice from their accountant or financial advisor on whether or they should boost their private pension funds and/or complete any form of land or property transaction before the Chancellor makes her Budget Day speech.”