The changing landscape of financial issues facing the farming industry is prompting increased demand for the services of our agricultural team.
Our dedicated farming team of seven is headed up by partner Darren Mewse who has a wealth of experience assisting farming and agribusiness clients in areas such as inheritance tax, succession planning, Capital Gains Tax and more.
Darren said several developments are currently driving even more demand for our services.
These include changes to the way farms are subsidised post-Brexit and the increasing costs of goods and services due to inflation.
As Britain has left the European Union, the government is scrapping the Basic Payment Scheme – in which farmers were subsidised based on the amount of land they owned – potentially to a model where they are funded in return for environmental outcomes. The BPS will be gradually phased out by 2027.
“That has created quite a lot of uncertainty and there are challenges around how they will replace that lost income as other environmental schemes may not be as lucrative,” said Darren.
“This is prompting people to look into diversification and the potential for producing renewable energy. This all has financial and forecasting implications which we are working through with farming customers across the county.
“Like all businesses, farms are also feeling the effects of increasing inflation but on a higher scale than the latest reported rate of 8.6 per cent as a whole. The cost of fertiliser has almost tripled and with the increase in feed costs, diesel, fencing and steel it is thought the inflation rate for agricultural related costs could be in the region of 23.5 per cent.
“At the same time the Bank of England base rate percentage has increased from 0.1 per cent to 2.25 per cent driving up monthly debt repayments.
“In the circumstances it’s more important than ever for farmers to have a good handle on their accounts. We work with them to make sure they’ve got a clear picture of their income and outgoings and can foresee any issues in advance, which is key to keeping on top of cash flow.
“Obviously, the future of the economy is quite unpredictable at the moment but we’re working with the farming community to make sure they come through it strongly and ready to grow when things stabilise in the future.”
In addition to the general economic pressures, farmers are also seeking help with the implementation of Making Tax Digital, a legal requirement for businesses to keep digital tax records and submit tax returns online.
Darren says this can be particularly challenging for complex farming businesses, especially those in remote locations with poor internet connectivity.
“With the implementation of Making Tax Digital we’re supporting more farmers with writing up their records, which is quite specialised in the agricultural sector,” said Darren.
“It needs to be done by members of our team who understand the sector.”
Beyond financial advice, we also support farmers in the area by providing sponsorship for local livestock sales and supporting the Farmer Network through sponsorship and running courses for its members.
Darren said: “The farming community plays a massive part in the Cumbrian economy and making the county what it is. We’re proud to support them in any way we can during these challenging times.”