With the overall longer-term economic outlook for farming positive and historic low base rates, many of our rural business and farming clients are investing in their future to improve efficiencies. Throughout the country the price of farmland has increased and one of the key benefits of this has been to provide security for borrowing. It can be difficult for people to enter the industry, or to get funds, without having land to secure debt against. But for those with land, using it as security to secure loans for investment has helped boost many businesses.
This last year has seen the change from the Single Farm Payment Scheme to the Basic Payment Scheme and the application of guidelines relating to land eligibility for entitlements, active farmer and greening requirements. Natural England published guidance on the Countryside Stewardship Scheme and the terms and conditions for Countryside Stewardship agreements were published in July.
The Department for Environment, Food and Rural Affairs announced the sum of £8 million funding available to rural businesses to “help unlock the huge potential for growth in the countryside”. It comes on the back of an announcement that the Government is to produce a Rural Productivity Plan which will boost productivity and ensure the countryside becomes an even more attractive place for people to live, work, start a business and bring up a family. Funding is through the Local Enterprise Partnership (LEP). Individual grants are worth upwards of £35,000 depending on the individual project. Many farms are looking to use these funds to diversify, given that in 2014 farms were the fastest growing tourist attraction.
If thinking of diversifying it is key to begin planning at an early stage by ensuring that specialist advisers such as land agents, planning experts, accountants and solicitors all work together to ensure the best result.
It is essential to think of the potential tax implications, including the impact on eligibility for Agricultural Property Relief (APR). For example, if old barns are converted into holidays lets, it might be sensible to review the farm business structure. Assets that are no longer eligible for APR could be placed into a partnership which is already eligible for Business Property Relief. It is important to ensure business operations, as well as the underlying business structure, maximise the eligibility for all possible reliefs.
It is always important to review succession planning. The inheritance tax (IHT) nil rate band is currently frozen at £325,000 until April 2018, and will continue to be frozen at £325,000 until April 2021. For deaths on or after 6 April 2017, the Government will introduce an additional IHT nil rate band (ANRB) when a residence is passed on death to direct descendants.
Natural England and the Forestry Commission have updated their guidance on the treatment of ancient woodland and veteran With the overall longer-term economic outlook for farming positive and historic low base rates, many of our rural business and farming clients are investing in their future to improve efficiencies. Throughout the country the price of farmland has increased and one of the key benefits of this has been to provide security for borrowing. It can be difficult for people to enter the industry, or to get funds, without having land to secure debt against. But for those with land, using it as security to secure loans for investment has helped boost many businesses. 21Annual Report 2014 trees when considering planning applications in England. This means that anyone who makes a planning application where there is a potential loss of ancient woodland or veteran trees will need to show that other factors in favour of development outweigh that loss.
The Deregulation Act 2015 (DA 2015) came into force on 26 May 2015 providing for major changes to the Agricultural Holdings Act 1986 (AHA 1986). It allows Third Party determination as an alternative method of dispute resolution to the current form of arbitration. This will be a welcome step for tenant farmers as it provides a more cost effective and flexible method of resolving AHA 1986 disputes. Third Party determination therefore provides the landlord and the tenant with far more autonomy and flexibility to manage and control the way their dispute is handled and potentially avoiding the costs involved with more formal methods of dispute resolution.
The pace of change in employment law has not showed any signs of slowing down and there have been a number of changes which impact rural businesses. A package of measures intended to improve compliance with the national minimum wage and the national living wage (when the latter is introduced in April 2016) has been announced.
Non-compliant employers will face higher fines and will potentially be disqualified from holding company directorships. The cost of employment is therefore set to rise for many. The way holiday pay is calculated for some employees and for workers (including casual staff), has changed, particularly for those that regularly work overtime. Many employees may have been underpaid for holiday pay if an allowance for lost overtime was not included in the pay calculation
Shared parental leave is now available, enabling both parents to take leave on the birth or adoption of a child, not just the mother.
And finally new arrangements are in place to help employers support individuals on sick leave. The Fit for Work Service provides occupational health assessments and is intended to assist employees who have been absent for four weeks or more, to return to work. Joanna Worby, Managing Partner, Brachers Sarah Webster, Head of Agriculture & Rural Business Brachers strong reputation of advising and supporting the agriculture sector and land based businesses has been built over a period of more than 100 years Please note this summary is not a substitute for legal advice.