Better Business: 8 top tips for farm tax planning

The twin prospects of higher borrowing costs and an election mean farmers and landowners should review their tax position. Catherine Desmond, a partner with accountant Saffery Champness, gives her top rural tax healthcheck tips.

  1. Communicate effectively with family members and where possible take action. Check that inheritance tax reliefs have not been compromised by new activities or ventures.
  2. Take care with the timing of investment allowances, especially where financial years straddle the scheme start and finish dates. New allowances for investment in plant, machinery and equipment were introduced from April 2014. The maximum is now £500,000 – but only until 31 December 2015 when it falls to £25,000.
    Catherine DesmondCatherine Desmond,
    Saffery Champness

  3. Review financial performance for the current year to determine whether the second instalment of income tax due on 31 July is still at the right level. If the tax liability for 2013-14 will be lower than that in 2012-13, you may be able to reduce the July payment.
  4. Consider the new individual savings account rules with a higher annual investment limit for 2014-15 of £15,000.
  5. Make sure you claim the £2,000 national insurance contribution employment allowance – some are missing out on this valuable saving.
  6. Be prepared for pensions auto-enrolment – start the registration process and budget for extra work to set up and run schemes.
  7. New ventures away from farming (including some diversification) could qualify for the enterprise investment scheme (EIS) or seed EIS which offer useful capital gains tax reliefs.
  8. Review partnership structures that have corporate members.

Are you, like many other farms, missing out on tax claims for R&D?

If you’re a limited company, you could be eligible for tax credits if you’re carrying out R&D on your farm. For more information and to find out if you’re eligible visit our R&D tax credits page.

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