Defra urges HMRC to show leniency to cash-strapped dairy farms

Defra has pressed tax officials to take a lenient approach when dealing with hard-pressed dairy farmers, farm minister George Eustice has revealed.

Mr Eustice said that the UK government had urged HM Revenue & Customs (HMRC) to look at the circumstances of individual dairy businesses.

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If necessary the hardest hit should be allowed to defer tax payments or allow bills to be paid in instalments, Mr Eustice told delegates at the NFU Scotland AGM in St Andrews on Monday (9 February).

“HMRC has procedures in place internally that enable it to show forbearance to particular sectors or individual businesses that are suffering financial distress as a result of a sudden change in their fortunes caused by market changes.

“We’ve made it clear that the dairy industry is in a particularly difficult position,” Mr Eustice said.

“Many dairy farmers had a very good year last year and so will be faced with a tax instalment in June that’s quite high, and that will come just at a time when they’ve had to weather a difficult winter.

“We’re very conscious of the pressure on cashflow at the moment for dairy farmers and that’s why we’ve asked the HMRC to show forbearance,” he said.

When pressed on whether potato growers would face the same tolerance after their difficult marketing season, Mr Eustice said Defra had not flagged particular problems in that sector.

He added: “However the process is open to all businesses.”