Farmers should make the most of the next few years as they are likely to be the most stable and profitable for a while, experts have warned.
Andrew Vickery, head of rural services at accountant Old Mill, said that farmers were likely coming into a period of greater stability, despite the political landscape shifting on a weekly basis.
“Look for the positives, but be realistic,” he said. “Agriculture is unlikely to be top of the list in terms of policy change for the Government, therefore the status quo is likely to be maintained.
“Farmers should therefore take advantage of the next three to four years and think about what to do after 2020.”
Though the Spring Budget did not bring any significant changes, farmers are nevertheless being urged to plan for the reduction in Corporation Tax from 20% to 17% by 2020, be aware of restrictions on buy-to-let properties and the increased main residence nil-rate band for inheritance tax of up to £1m.
“The Government’s Making Tax Digital plans have been scrapped, which may be a temporary or permanent measure,” explained Mr Vickery.
“Though this would have driven more red tape regulation, it would also have been a real incentive for those who need to tidy up their accounts.”
Make best use of profits
According to Paul Blundell, relationship director rural services at HSBC, the next few years were an opportunity for farmers to make best use of profits.
“What farmers do with any profits is very important – whether paying off debt or putting cash aside for the future.
“With uncertainty facing agriculture after 2020, having money put aside would be important, so now may not be a good time to invest in new machinery.”
In 2016, the UK economy grew by 1.8%; the second highest growth of any country in the EU, said Mr Blundell.
“HSBC predicts that inflation will reach 3% by the end of the year, while interest rates are unlikely to change before 2019. There has been a spike in commodity and milk prices which is really positive for the industry. This is therefore a time to make money and deal with it sensibly.”
