Most farmers will be relieved after hearing the Chancellors budget which was not as bad as it could have been for the industry according to Matthew Anwyl, managing partner of Berrys in Shrewsbury.
The announcement that there is no plan to join the euro in this parliament is a good sign for farmers who benefit from a favourable exchange rate and a continuing strong export market for their goods, particularly bearing in mind the economic situation within the rest of the Eurozone.
There is no change in fuel duty, which is good for farmers and people living in rural areas and talk of a fuel rebate for rural areas, which is interesting.
There will be a £21 above indexation rise to employers NI threshold from April 2011 to help businesses cut the cost of employment. This will particularly benefit farmers who employ lower paid casual and seasonal workers such as fruit and vegetable pickers.
The reduction in annual depreciation allowances to 18 per cent will cost farmers a little bit more as they won’t be able to offset machinery expenditure so quickly against their profits. However there is time to plan capital investment decisions before the change.
Capital Gains Tax increases – the good thing here is that the change is relatively small and the higher rate goes straight up at midnight so there will be no sudden rush in higher rate tax payers disposing of properties and other assets before the tax kicks in.
The small number of farmers running businesses as limited companies will welcome the cut in Corporation Tax rate to 20 per cent for small businesses. VAT rate to increase as we thought but there’s still no VAT on food – good decision for farmers and consumers.
Good news that there was no mention about Agricultural Property Relief in the chancellors speech but the devil is always in the details so we may have to wait and see. The reintroduction of the furnished holiday lets rules will be appreciated by those owning holiday cottages, which provide a valuable alternative income for many farming families.
