TaxCorporate TaxRevenue urged to update farming policies

Revenue urged to update farming policies

Top 20 firm Saffery Champness is urging the Inland Revenue to update its tax relief system for farmers to meet the needs of a more diversified sector.

Link: Farmers to get massive income boost

Saffery said a farm’s activities – both farming and non-farming – should be treated as one taxable business unit to ease problems that occur when the two income streams are taxed independently.

UK farmers are being encouraged to diversify their activities, and focus on non-farming activities, following a 46% rise last year in tourists visiting rural attractions around the country.

However, policies need to change, after figures supplied by the ICAEW showed that average farm profits fell by 26% for the year-end April 2003, despite this increase.

Martin Webster, partner at Saffery Champness said: ‘The nature of farming is changing dramatically, but the tax system is not evolving with it. The Inland Revenue needs to reflect the fact that farmers need to diversify to supplement poor farming incomes.’

Webster said the Revenue should allows farm losses to be set against other non-farming income and capital gains for the same or previous tax year to reduce any tax liability.

Currently, farmers will lose the right to use this ‘sideways’ tax relief if there has been seven consecutive years of losses and the eighth year remains loss-making.

Webster also warned that farmers would lose the inheritance tax exemption available on a farm business if they use their farm buildings for non-farming activities.

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

3m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

3m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

3m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson