UK farmers get off lightly on direct tax

By FWi staff

BRITISH farmers escape relatively lightly when it comes to direct taxation, according to a recent study by the European Federation of Agricultural Consultancy.

Expressed as a percentage of average gross national product (GNP), it shows that Swedish farmers pay some 53% in income tax and national insurance, compared with just 38% in the UK.

Only Germany pays less, at 37%, while Denmark, France and Holland all pay more, at 49%, 45% and 41% respectively.

But the NFU is quick to point out that the report only deals with direct taxes.

“In the UK there is much greater emphasis on indirect taxes, such as fuel tax, landfill tax, insurance premium tax, maybe even a pesticides tax,” says NFU specialist Tony Donaldson.

“You cant escape these taxes, even if you are trading at a loss.”

Differences in the way accounts have to be prepared also discriminate against UK farmers.

“Things are much less onerous in France and Germany. Much more is done on a notional basis, giving scope to pay less tax.”

Further differences have been unearthed in the treatment of national insurance contributions.

But the relatively low figure for the UK – 18% of total tax revenue compared with 43% in France – masks the fact that most British farmers have to make personal pension provision as well, pushing up costs, says Mr Donaldson.

See more