Farming has fallen on hard times and the fallout from low commodity prices, extreme weather events and delayed BPS payments, has taken its toll.
Not only has it hit businesses and household bank balances, it is also putting huge strain on relationships and people’s physical and mental health.
But farmers and their families needn’t suffer in silence. Instead, there are numerous charities, organisations and other services offering a wide range of help – if only people ask for it.
This guide brings together practical advice for managing your farm business and personal finances through tough times, and looks at how and when to seek help for physical and mental health problems.
1. Plan before disposing of assets
Farmers looking to dispose of assets to free up capital need to ensure sales do not incur a hefty tax bill
Rob Hitch, director at accountant Dodd & Co, says a common mistake is for farmers to sell off a parcel of land, only to create a capital gains tax bill equivalent to 28% or 18% of the sale.
“Small blocks of land will usually be fine – small part-disposal rules apply for transactions up to £20,000 – but sales of anything of a reasonable size can incur a bill from HMRC. The sale could benefit from entrepreneur’s relief, which will reduce the tax bill to 10%.”
Mr Hitch says some farmers have benefitted from lease-back agreements where land has been sold and rented back on a long-term tenancy.
“This is effective because you don’t lose the productive capacity of the land, but you realise the equity from it.”
Slimming down the farm’s machinery is another option to free up funds, but machinery purchased outright using capital allowances relief can also incur taxes, as the sale will be taxed as income.
“For hired-in machinery, asset finance companies can be reluctant to extend payment terms, but many will refinance a machine at the end of an agreement, so there’s scope for negotiation.”
2. Examine your business
Rob Selley, an associate at rural accountant AC Mole & Sons, says an eye for detail is essential. Consider:
* Preparing a cashflow forecast. This will highlight times when money is tightest and show potential cost savings.
* Hire purchase or leasing for essential capital purchases.
* Benchmarking against other similar farming businesses. This can highlight areas for improved profitability, efficiency and cost-cutting.
* Whether your assets can work harder for you. Renting out farm buildings or running a bed and breakfast works for some. However, they can be costly to get off the ground, so good market research, planning and realistic forecasting are essential.
3. Approach your bank for help
Oliver McEntyre, Barclays’ agriculture strategy director, offers advice.
* Communication is key. It is more impressive to a bank manager if someone asks for money to see their business through a difficult period than spotting that their overdraft has been exceeded.
* Bring your cashbook and budget to meetings and know what will happen if your BPS doesn’t come in time or farmgate prices change.
* Overdraft increases are the easiest to facilitate, but banks can look at restructuring existing borrowing. Turning borrowing into an interest-only facility is a useful tool, which can ease pressure on cash.
* Knowing your cost of production and where the market has to go to make a cash surplus shows you know your business.
* Farmers experiencing problems because of delayed BPS payments can access a fee-free overdraft facility from most banks. Note that interest will still apply, though.
4. Making a position redundant
Phil Cookson, a partner at Roythornes Solicitors, warns that handling redundancy badly can cost in the long term.
* Selecting employees to be made redundant often catches farmers out. Individuals must be scored objectively against the needs of the business in the future, rather than operating a last-in, first-out policy.
* The role, not just the employee, must be made redundant.
* Employees with long service will be entitled to longer notice periods (redundancy payments) – one week for every year of service, up to a maximum of 12 years.
* Alternatives to redundancy might include a job share, pay cut or reduced hours.
* Consider the Transfer of Undertakings Protection of Employment (Tupe) regulations when outsourcing work (this protects employees when they are transferred to another company). If the contractor won’t take on your members of staff, you may breach Tupe regulations if you then make them redundant.
Where to go for help
Support and guidance for personal and business issues, including tenancies, financial problems and accessing welfare benefits.
Helpline 03000 111 999
General enquiries 01788 510 866 or firstname.lastname@example.org
Farmers who find themselves with increased on-farm costs through no fault of their own can apply for hardship grants.
01926 620 135
The Rural Support charity in Northern Ireland offers a listening and signposting service for farmers and rural families and also meets face to face to offer support to those in need.
Helpline 8am–11pm, seven days a week 0845 6067 607
For support grants, relief farm workers and expert financial and personal support across England and Wales.
Helpline 0808 281 9490
For general enquiries phone 01865 724 931
Offers a range of financial and practical support to crofters and farmers of all ages in Scotland. Helpline 0300 111 4166
Lincolnshire Rural Support Network
LRSN helps its county’s farmers through a range of issues through pastoral and practical support.
0800 138 1710
Rural support service in south-west Wales for both English- and Welsh-speaking farmers.
Call 07814 272 998
Provides money to help farmers affected by the Cumbrian flooding in December 2015.
Provides forage and/or bedding for livestock farms affected by an extreme weather event. 07967 219 991
Businesses that were unable to pay their tax on time can call HMRC on 0300 200 3822 to assess the next steps.
Confidential help with access to the Addington Fund, FCN and Rabi.
0845 367 9990
Help with debt, benefits, tax, housing, welfare and many more personal issues.
Help for those in farming who may be affected by stress and depression
0300 323 0400
A national mental health charity with local branches covering England and Wales.
Call 0300 123 3393 weekdays 9am to 6pm
Confidential support line for anyone who wants to talk to someone about their problems.
Suicide prevention support aimed at young people, but open to all.
0800 068 4141, text 07786 20969
Support for young people based in rural communities.
Most issues relating to a farming family’s household income will stem from problems with business profits. But a closer look at personal finances may help unlock cash and alleviate the strain.
Rob Harris, communications manager at the Royal Agricultural Benevolent Institution (Rabi), says the support available from the network of rural charities is rich and varied.
“Our welfare officers regularly sit down with people needing help and work out a plan – in 2014 they helped people claim more than £380,000 in state benefits and tax credits.
“Our package can include paying domestic utility bills, providing food vouchers and hampers, covering the costs of visiting hospital, paying for relief farm staff, or buying emergency items such as disability equipment.”
Are you claiming all that is owed to your family?
For parents with dependent children up to age 16, or 20 if in full-time education. Worth £20.70/week for the eldest child, £13.70/week for others.
Child tax credit
State benefit that is worth £10-£105/week depending on the number of children you have.
Maternity, paternity and adoption pay
Statutory financial support when your baby is born that amounts to 90% of your average weekly earnings for six weeks, then a maximum of £139.58 thereafter, paid by employers.
This could save up to £212 in tax a year. It allows married couples or civil partners to transfer unused personal tax allowances.
A one-off payment to help pay for baby equipment to the value of £500. Qualification criteria applies.
Self-employed workers, or those who don’t qualify for statutory maternity pay can get a maternity allowance for up to 39 weeks, worth up to £139/week.
For over 65s who need frequent help with personal care. Ranges from £55.10 to £82.30/week.
Those caring for someone for more than 35 hours a week can claim £62.10/week, depending on earnings.
Statutory sick pay
About £88/week can be paid to employees off sick from work for more than four days, for a period of up to 28 weeks.
All those who have reached the government-defined retirement age. Currently £115.95/week or £185.45 for a couple.
Winter fuel payments
One-off payments made each winter to those over 60, regardless of the temperature, worth £200-£300/year depending on age.
This payment ranges from £57.90 to £114.85/week to people who are not expected to look for work, for example, carers or lone parents with children under the age of five.
A pension top-up payment for most over 60s – often overlooked by many. Payments vary.
For those on a low income who struggle to pay their rent. Payments depend on rent and income.
Council tax support
An average council tax reduction of about £25/week for those on a low income.
Cold weather payments
These £25/week payments are made to those receiving certain benefits to help with gas and electricity costs during cold weather.
Physical and mental health
Tough times in farming can last for months or even years, placing huge physical and mental strain on individuals and families for sustained periods of time.
Thankfully, many long-standing organisations offer support and many new ones are reaching out to rural communities in new ways.
One such example is the Lincolnshire Rural Support Network, which is encouraging farmers to look after their physical and mental health by embedding itself at the markets in Louth and Newark.
Mental health warning signs to watch out for
* Sleep – either a lack of it or lots of broken sleep – is one of the first symptoms.
* Displaying lots of high-energy emotions such as anger, frustration or irritation.
* Eating or drinking more than usual is often an attempt to numb feelings of depression or any other mental health issue.
* Not wanting to get out of bed or waking up feeling extremely tired.
Project manager Alison Twiddy says it is making a big difference.
“We have had people tell us that if it wasn’t for us, their dad would be dead because he wouldn’t have gone to see his GP about a problem.”
She says health screenings have already taken place at Bakewell and Exeter markets and issues typically seen in farmers include dementia, self-harm among young people, alcoholism, anxiety and depression.
Suicide is, unfortunately, a big issue in the farming community. Simon Howarth, at suicide prevention charity Papyrus, says isolation is a key contributing factor when an individual is thinking about taking their own life.
“In rural areas the support is a lot harder to find than in the city,” he says. Many contacts come from those who are worried about a friend or family member, he adds.
“We will not contact that person directly, but we will help the person who has contacted us to encourage that friend or family member to get in touch.”