Budget update for farming families
- AuthorCaroline Dowding
The budget has been eagerly awaited, with announcements in recent times to scrap Entrepreneurs Relief, Agricultural Property Relief (APR), Business Property Relief (BPR) and other taxes which would directly impact our farming clients.
So, what have the changes been?
I am pleased to confirm that both APR and BPR live to fight another day. With the proposed changes made by the Office of Tax Simplification, as seen in my article on 3 February 2020, it is likely that such changes will need to be widely consulted on before they are implemented, which would give farmers and those working in the industry a chance to argue why these valuable reliefs need to be retained.
As you may have seen in my colleague, Jessica Newton’s, article on 4 December 2019, Entrepreneurs Relief on Capital Gains Tax was also under threat in this Budget, with Chancellor Rishi Sunak describing the relief as “expensive, ineffective, and unfair”. To the relief of many, Entrepreneurs Relief has not been scrapped, but the lifetime allowance has been reduced from £10m to £1m, meaning that more businesses will pay tax on businesses sold with a profit over £1m.
Before the Budget, there were rumours that the Chancellor was also planning to scrap the lower rate of fuel duty, in a bid to encourage greener alternatives. Fuel attracts a duty of 11.1p a litre compared with 57.7p for standard diesel. It was argued that implementing a duty rise would have a serious negative impact on farming business. Fortunately, it has been confirmed that the agricultural industry will retain the red diesel exemption for the time being, having listened to concerns from the industry, particularly, the NFU.
Overall, the impact of the Budget for the farming community has less impact than many thought it might have, with other global issues, rightly, being at the forefront of the decision making.
If you have any concerns about any of the changes announced in the Budget, call our Agriculture and Estates team. I am based at our Colchester office and can be reached on 01206 217394 or firstname.lastname@example.org.