The National Farmers Union has responded to today’s Autumn Statement from the Chancellor.
Sean McCann, Chartered Financial Planner, NFU Mutual said there was little in the headlines to help struggling farmers or boost the rural economy – but the detail of the budget does have a few nuggets farmers can use to their benefit.
He added: “Many farmers have investment bonds for a long-term and tax-efficient saving – there’s good new with changes in taxation which should make taxation of any withdrawals much fairer and simpler to understand.
“The Chancellor’s promise to increase the tax-free personal tax allowance to £11,500 in April 2017 and £12,500 by the end of the current parliament will put more money in the pockets of taxpayers. For those paying higher rate income tax, the Chancellor’s promise to raise the threshold for 40% tax to £50,000 over the same period is a real benefit.
“Many farmers have invested in buy-to-let to diversify their business interests and provide an income. The Chancellor’s announcement of a ban on charging tenants letting agent fees could force more costs on landlords – yet another hit on the potential income from buy-to-let.”
Tim Price, Rural Affairs Specialist, NFU Mutual said in relation to fuel duty: “Farmers and country people can breathe a huge sigh of relief that the planned increase in fuel duty won’t take place – and there were no measures to penalise users of diesel vehicles – which provide vital transport for farmers and many people living and working in the countryside.”
In relation to rural broadband, Mr Price said: “Let’s hope the Chancellor’s announcement of 100% tax relief on companies providing fibre optic services will help get decent broadband to more rural areas and enable them to join the modern business world.”
NFU director of policy Andrew Clark said: “The NFU’s vision is clear: competitive, profitable and progressive farm businesses are central to a dynamic UK food chain and a thriving food and farming sector. Farming is the bedrock of the UK’s food and drink industry worth £108 billion to the economy and providing jobs for 3.9 million people, all while providing great British food.
“While there are some positives measures announced today, it is disappointing that the Chancellor’s Autumn Statement fell short of delivering measures that will enable our farm businesses to maximise their potential.
“The Chancellor’s planned reduction to the rate of Corporation Tax, while providing benefits to the supply chain, does little to help the majority of farm businesses that are unincorporated. Farm businesses need to be able to retain and invest profits in infrastructure and equipment to improve their productivity and the tax system needs to recognise and support this, as it does other parts of the economy.
“The National Living Wage rate will be increased to £7.50 per hour in April 2017. The NFU strongly supports a living wage for all workers but we have expressed to Government our concerns about the speed of the implementation. Accelerating increases will make this even more difficult for employers and we remain concerned about the lack of consultation with the agricultural and horticultural sector on these measures and how they will affect farm businesses.
“Although the Chancellor has announced a new National Productivity Investment Fund that will add £23 billion in higher value investment over the next five years, including a £2 billion investment in research and development, it is not clear where this will be spent. The Government must continue its support of the Agri-Tech Strategy and this new investment simply must include the agri-food sector.
“British farming will need a strong and functioning research and development pipeline to deliver solutions to both increase productivity and deliver environmental goods. To achieve this ambition to be at the cutting edge of science and technology, the whole country must be digitally connected and be able to utilise technology.
“We note the announcement of £700 million into full-fibre connections and 5G. We are eager to see what this will deliver for the remaining 5% unable to access adequate digital infrastructure at the moment – many of whom are in rural areas.”