Simon Gooderham, Managing Partner at Cheffins, describes today’s Budget as a “complete non-event” for the farming industry, with no significant measures to ease financial pressures on agricultural businesses. He highlights the missed opportunity to reverse changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), alongside rising labour and input costs that will continue to squeeze farm profitability.
Read Simon's full reaction here:
Simon Gooderham, Managing Partner, Cheffins says:
“From a farming perspective, the Budget was a complete non-event. Disappointingly, there were no major announcements or financial packages which could help struggling farming businesses. This was a clear opportunity for the Labour government to reverse the punitive changes to APR and BPR which were introduced two years ago. An increase or removal of the £2.5m cap was an opportunity to rebuild bridges between the current government and the farming industry and there will be many who were disappointed that this opportunity wasn’t taken up.
While there was no reduction in tax liability for farmers, there was also an increase in costs hidden among the detail in today’s Budget. The increase in minimum wage and the national living wage will add yet further costs to the farming labour bill. As an industry which relies heavily on unskilled labour, this increase in wages could have a very real impact on some farms’ bottom lines.
A very small silver lining perhaps was the Small Business Rates Relief threshold which was increased from £12,000 to £18,000 and should help to support small businesses which are the lifeblood of rural communities. Hopefully this ought to help farmers who run farm shops and cafes or even village pubs and other diversified farm building uses, all of which are an essential part of the rural economy. Similarly, extending the 5p cut in fuel duty is welcomed, however it is disappointing that this wasn’t tallied with further relief for red diesel, which would be most welcomed by farmers to help offset the unprecedented high diesel costs.
Another possible other option for the government would have been to postpone or scrap the CBRM ‘fertiliser tax’ which will still come into effect on 1st January. This will add further costs to input prices which have already been scaling upwards at pace. Unless the government finds a way to reduce input prices, farming and food production is going to continue to struggle to keep its head above water.
Despite the intense lobbying from the NFU and the likes of Jeremy Clarkson bringing the plight of UK farmers to TV screens up and down the country, it has become clear that the government’s priorities lay elsewhere. Andy Burnham had said he wanted to ‘reopen the conversation’ with farmers and this Budget was the perfect opportunity for that.
In the meantime, we will be supporting our farming clients with ongoing advice to help them navigate through the continued challenges ahead by maximising returns from their assets."
To find out more about Cheffins' Rural Advisory Services, please visit: https://www.cheffins.co.uk/rural.htm