Farmers should prepare now to avoid a VAT hike coming in the New Year, says Strutt & Parker‘s George Chichester.
VAT was cut to 15% last year, but is due to go back up to 17.5% on 1 January 2010.
“If you’ve got any expenditure planned where VAT cannot be claimed back, it could be worth getting on with it sooner rather than later.”
Such purchases include repairs to estate cottages or to cottages occupied by private staff; repairs to private houses (including the farmhouse); and some professional fees, he said.
“Who knows whether VAT will stay at 17.5%,” Mr Chichester added. “The government has lost a lot in tax revenues and invested huge amounts in the economy, all of which they’ll be keen to get back. I think both parties are holding back from the true extent of the problem until after next year’s election. I suspect it’ll be in the year after the election that we will see businesses squeezed on the availability of subsidies and higher taxes.”