Agriculture

In the face of the Basic Payment Scheme being phased out, the ongoing impacts of Brexit, climate change and labour shortages, the agricultural sector is at the start of a decade of major change. Many farms will be feeling the squeeze right now, but there are a few key steps that can be taken to build resilience into the future:

1. Understand your current financial position. Our agricultural team can help you to gain an in-depth understanding of key figures such as your break-even point and profit from each income stream. That way, you can gain a comprehensive view of the most profitable areas of the business.
2. Bridge the gap. Carefully assess how to bridge the income gap when subsidies are removed, taking advantage of available advice lines and incoming environmental schemes.
3. Adapt your current farming practices. Our team can advise on how to proactively adapt your current farming practices to increase profits, from diversification to taking advantage of available schemes.

For more information on how to prepare for a decade of change, you can read this blog or get in touch with one of our agricultural experts.

Research & Development (R&D) tax credits are available to support companies that are innovating within their sector. Depending on the case, you could be able to claim up to 33p for every £1 spent on qualifying R&D work. For expenditure on or after 1 April 2023, there will be a cut in the R&D tax relief to 86% from 130%. You’ll need to prove that the work you’re undertaking is industry leading, but you can make a claim on both successful and unsuccessful projects.

There are a number of opportunities for R&D tax relief in the agricultural sector, and many businesses miss out even though they are already conducting projects that could be eligible. From activities aimed at increasing yield to improving automated processes, the agricultural sector is awash with opportunities for R&D relief. Our team of specialists have helped a variety of agricultural businesses to make successful claims, and can identify any work you are undertaking which might be eligible for R&D tax credits.

Succession Planning can be a daunting process, but it’s important not to bury your head in the sand. Our experienced succession planning specialists will get to know your business, helping you to start the conversation and safeguard the farm and your family’s future.

Many farming families find it difficult to know how to divide things up when the next generation are seeking different levels of involvement in the business. However, in these cases it is important to realise that often the ideal solution is one that is unequal but fair, taking into account each family member’s individual position and considering all tax implications in the round. You can read more about how our team has guided other businesses through the process here.

Capital allowances (CA) provide relief from income tax and corporation tax in respect of capital expenditure. They can be claimed on qualifying expenditure on plant and machinery, an extensive catch-all that includes items from tractors and lorries to foundry equipment and refrigeration units. The rules covering capital allowances are complex, and our tax experts are constantly reviewing the existing case law to identify new opportunities for our clients.

There is currently a generous “super-deduction” rate on capital allowances in operation until March 2023, meaning that farms could be looking at up to 130% tax deductions on plant and machinery spending. For more information on how rural businesses can take advantage of this tax saving opportunity, head to our blog.