Today’s Chancellor’s Autumn Statement offered little to help farmers currently struggling with low farm gate prices – but there were some measures to ease strains on the rural economy, said Tim Price, NFU Mutual Rural Affairs Specialist.
“Firstly, there was relief that the Chancellor didn’t use the excuse of lower petrol and diesel pump prices to increase the duty on fuel – easing pressure on motoring costs for country people who have limited access to public transport,” he added.
“Concerns that cuts to police budgets would result in poorer policing of rural areas were allayed as the Chancellor decided not to make the widely-forecast cuts to their funding.
”For the long-term, the announcement of a new Precision Agriculture Innovation Centre and £50m funding for two agricultural technology centres are great news which should help farmers become more efficient and better to compete in world markets.”
Analysing measures affecting farmers’ pensions and taxes, Sean McCann, Chartered Financial Planner at NFU Mutual, warned that further changes to restrict the growth of the buy-to-let market would make this a less attractive option for many farmers.
“The Chancellor’s surprise announcement of 3% extra Stamp Duty on buy to let and second home purchases from April 2016 combined with a new measure reducing the time when Capital Gains Tax must be paid from a maximum of 22 months to 30 days after selling a buy-to-let property from April 2019 is yet another blow for this sector,” he said.
Another change which could help farmers reduce their tax bills in good years was the newly-announced option of either a two or five year ‘averaging’ period for tax purposes, Sean said.
Turning to a surprise announcement of reduction in the Corporation Tax rate to 12.5% for Northern Ireland from April 2018 - as opposed to the current 20% charged across the UK, he suggested farmers could consider changing the status of their farm business to potentially cut tax bills.