Following the Summer Budget, Sean McCann, Chartered Financial Planner at NFU Mutual reviews George Osborne’s Summer Budget delivered today (July 8) and highlights some of the announcements on tax and pensions that will impact farmers and country people.
“The Chancellor has introduced a far-reaching range of measures which will have a major impact on individual families and businesses over the next five years,” he said.
“The measures announced amount to a major structural reform of the way businesses, individuals and families are taxed and the tax reliefs available to them.
“We’re going to have to study the detail of the planned changes to understand the full implications – but it’s clear that all three groups will need to review their finances and seek professional advice to use the new rules to their advantage.”
Turning to the immediate and short term measures announced by the Chancellor, Sean warned that increases in the minimum wage from £6.50 to £ 7.20 next year and to £9 by 2019 for workers aged over 25 could be very difficult for some farmers struggling to cope with low farm-gate prices.
“News that enhanced annual investment allowances are to be made permanent is great news for farmers and small businesses owners. It means they can be more confident in investing for the future in new machinery, plant and IT.”
Sean also welcomed the planned phased increase in Inheritance Tax threshold to £1m where a family home was part of the estate as it could help farmers pass on assets to their children and grandchildren.
“This is especially welcome for farming families who have recently been under attack from HMRC with closer scrutiny of claims for Agricultural Property Relief on farmhouses,” said Sean.
News that tax relief on mortgage contributions for ‘buy to let’ properties was less welcome: “For the many farmers who have gone into ‘buy to let’ to spread their income away from total reliance on farming, the announcement that tax relief on mortgage payments will start to be reduced for 40% taxpayers takes the shine off this sector.”
Finally, news that taxation on petrol and diesel would not be increased this financial year was good news for farmers and country people.