Agricultural organisations have called for the Government to make tax changes ahead of the Chancellor聮s Spring Budget (March 15), with the Tenant Farmers Association (TFA) urging the Government to implement the taxation recommendations set out in the Rock Review report.
TFA chief executive George Dunn said the 74 recommendations took a 聭solutions-based approach聮 to issues faced by the tenanted sector and it was vital the Treasury acted on them.
Mr Dunn said over half of the tenanted sector of agriculture in England and Wales now fell under farm business tenancies, and this was expected to accelerate further.
聯With the average length of term on these agreements just three years and with nearly 90 per cent of those tenancies let for five years or less, they provide no incentive for investment, progression or in terms of the delivery of the Government聮s natural capital objectives for carbon, biodiversity, nature, water, soil and renewable energy,聰 he said.
He said the most effective way to encourage longer term lettings was through changes to Inheritance Tax, calling for Agricultural Property Relief (APR) to be 聭regeared聮 to benefit those willing to offer 聭more reasonable levels of security of tenure聮.
He added landlords letting for 10 years or more could be given new reliefs through the income tax system.
聯A combination of carrot and stick will be a powerful force for good in driving longer-term tenancies and protecting the long-term security of the let sector of agriculture whilst operating at least fiscally neutrally,聰 said Mr Dunn.
NFU Mutual has called on the Chancellor to thaw frozen tax thresholds, saying keeping them unchanged meant high inflation was reducing farming families spending power with more families also being forced to repay or opt out of child benefit as wages increase.
Farming families聮 ability to pass assets down to the next generation was under threat from tax-free allowances on Inheritance Tax being frozen, when passing down parts of the business which do not quality for APR or business property relief (BPR).
Sean McCann, chartered financial planner at NFU Mutual, said inheritance tax was 聭unnecessarily complicated and ripe for reform聮.
聯Getting rid of the myriad of gifting allowances in favour of one annual gifting allowance of 拢15,000 would help simplify the tax for the increasing number of families who fear being caught by inheritance tax,聰 he said, adding it was important any changes did not impact APR or BPR.
NFU Mutual called for an increase in how much can be accumulated in pensions tax-free to help farmers provide an independent source of income in later life. It also urged the Government to defer the 5p rise in fuel duty and maintain the existing energy price guarantee for households.
