The Brexit negotiations are still very much up in the air and with all the political backstabbing, it is an impossible task for anybody to be able to predict when and how we will be officially leaving the EU.
A lot of farmers have hunkered down since Brexit was announced, hoping to deal with any business planning when we knew more. Unfortunately, that “knowing more” never came, and understanding the UK’s future out of the EU and its implications for agriculture are still very much a crystal ball situation.
Based on the things we know, it is certainly time to start thinking and planning for those who have not done so already. Firstly, we know; subsidies as we understand them, are on the way out. The Government are talking now of public money for public good as a replacement, which essentially indicates farmers will no longer be getting a lump sum of subsidies based on land controlled by the business. Therefore, perhaps is it time to make those capital investments and upgrade the farmyard for example whilst the BPS is still available? If you think you will be upgrading fixtures or machinery in a year or so, it might be sensible to bring that forward where possible, whilst you have the additional benefit of subsidies, although do bear in mind existing hire purchase agreements and annual investment allowances.
Certainly, in terms of upgrading the farmyard, if you are lucky enough to be in a “high priority area” for Countryside Stewardship, there’s a wealth of grants available for farmyard concrete renewal, slurry and silage pit roofing, relocation of sheep dips etc… These grants can be standalone capped at £10,000, or potentially unlimited if combined with a mid or higher tier agreement. Saying that, stewardship agreements are not the be all and end all, they need a great deal of thought prior to entry, particularly given the uncertain future. It is essential that you gain a robust agreement that enables you to still farm profitably and productively, while capitalising on the available capital works.
In terms of what we don’t know, its extremely vast, which is why it is always a good time to think about succession planning, partnership agreements, and considering your estate in terms of tax. If there was to be a change of government, rumours are rife that agricultural property will not be treated as favourably as it has been historically when it comes to inheritance tax. So, it certainly would be prevalent to start talking to your legal advisors and accountants about making plans for the future of your estate that maximise tax benefits and achieve all your personal goals. When considering tenanted holdings, succession has been a buzz word for surveyors and solicitors recently, and it is certainly better to establish a plan with the benefit of time, rather than under the pressure of time constraints applied after death or when retirement is far overdue!
Hindsight is a wonderful thing, so thinking ahead and making plans is never time wasted, and ultimately should save time and money in the future.
For further information on any of the above please contact Ellie Watkins, based in the Hereford Office on 07495 006808.