Like many farmers, thanks to better farmgate commodity prices and an SFP enhanced by sterling’s weakness against the euro, my financial year to 5 April 2012 turned out much better than some of late.
But it is with great surprise that I read about the financial squeeze that many farmers face as they pay huge tax bills in January. I say “surprise” because long ago I joined the glamorous ranks of Starbucks, Google, Vodafone, Amazon and co and learned how to limit my UK tax burden.
For any novices in this area, the first thing to be clear about is that tax “evasion” is a crime for which anyone can, quite rightly, go to jail. Tax “avoidance”, on the other hand, is to be greatly admired and will not only make you extremely rich and successful, but could even earn you an honour or seat in the House of Lords (provided you make adequate donations with some of your tax avoidance bounty to UK party political funds).
So it is that for many years now my farming holding company “Carrbucks” has been registered in the little-known Caribbean atoll of “Amoral”, which is about the size of two tennis courts. Amoral has very basic facilities: a few mud huts and three puny coconut trees. However, it does boast a helicopter pad, a few luxury villas and, most important of all, no taxes whatsoever.
Such arrangements need careful planning and the help of a top City of London firm of accountants whose partners charge more than £1,000 an hour. Indeed, as we recently drank champagne on the 75th floor of the firm’s City skyscraper to celebrate Carrbucks’ ongoing success, they reminded me that they always promise clients a tax saving of 10 times their fees – and so it has proved.
One of the first things they advised me to do was transfer ultimate ownership of my sleepy Sussex-based farming partnership to Carrbucks. So although the partnership still farms nearly 2,000 acres in Sussex, it only does so under “licence” from Carrbucks, which charges the farm a “farming rights fee”, which conveniently transfers any trading profit that might have been subject to tax in the UK to the tax-free jurisdiction of Amoral.
Being rather conservative in outlook, one or two of my employees questioned the ethics of my new arrangements. But, by the time my financial advisers had explained that they too could enjoy similar benefits from Amoral status, they were soon as enthusiastic about it all as I was. So my tractor driver is now a “field operations consultant” whose “compensation package” is paid directly to his new tropical bank account, where it is beyond the reach of UK income tax and National Insurance contributions. My “sheep birthing contractor” has similar arrangements. And all this without affecting our ability to access the NHS, schools or any other of the services provided by those who still choose to pay their UK taxes.
Of course, the UK tax authorities do take more than a passing interest in my cutting-edge financial arrangements. I am currently in discussion with them about some sort of tax “offer” and the outcome of these negotiations is not yet clear. But let me assure you that making a token “offer” about how much tax to pay is so much more satisfactory than receiving a “demand” for tax, which some of my rather backward farming colleagues apparently face next month. Happy New Year – or, as we say in the Caribbean at all times of year, “Wise up, sucker.”
Stephen Carr runs an 800ha sheep, arable and beef farm on the South Downs near Eastbourne in partnership with his wife Fizz. One-third of the acreage is in conversion to organic status.