Loss relief budget blow for farmers

A cap introduced in the Budget to limit tax relief for trading losses will affect some farm businesses significantly, warn accountants.

The new measure restricts the ability of individuals to offset trading losses in one business against income and profits from other sources.

“From 6 April 2013, total tax reliefs on income will be capped at either 25% of annual income or £50,000, whichever is the greater,” said Richard Cartwright, a partner with accountant Saffery Champness.

“It won’t affect everybody but some people do bank on being able to offset their farming losses.”

Diversified farming businesses where the farming and diversification enterprises were run as separate businesses could be affected, as would those who had earnings outside the farming business against which farming losses could be offset.

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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