The future is brighter, the economy is picking up, the farming year is well underway, and there are a number of steps that farmers and land owners can take now to put their tax affairs in better order for the future.
With the prospect of higher borrowing costs threatened as the economy firms, Catherine Desmond, Partner in the Landed Estates and Rural Business Group of UK top 20 Chartered Accountant Saffery Champness, says a number of steps can be taken to streamline your tax affairs. Her top 10 Rural Tax Health Check tips are:
1. Don’t leave long term tax planning until it’s too late – communicate effectively with other family members and where possible take action now.
2. New allowances for investment in plant, machinery and equipment were introduced from April 2014 for a limited period only, £500,000 being the new maximum until 31 December 2015 when the limit reduces drastically to just £25,000. Care needs to be taken with financial years that straddle the start and finish dates for the scheme, and an investment programme for this year and next year that takes full advantage of the scheme should be planned now.
3. Have a look at business performance for the current year in order to determine whether the second installment of income tax due on 31 July is still appropriate. Have circumstances changed so that your tax liability for 2013/14 will be lower than that in 2012/13?
4. The new ISA rules introduced a higher annual investment limit for 2014/15 of £15,000 from July 2014. Have you considered taking advantage of this?
5. Make sure you have claimed the £2,000 (NIC) employment allowance where appropriate.
6. Be prepared for Pensions Auto-enrolment. As staging dates for employers with smaller numbers of employees approach so the system is likely to become more saturated - so start the registration process sooner rather than later. Also, have you budgeted for the additional workload for both setting up and running your scheme?
7. If considering new ventures away from farming could the Enterprise Investment Scheme (EIS) or Seed EIS help to get these going, particularly because of the useful CGT reliefs that they bring?
8. Review partnership structures that have corporate members to ensure that these do not fall foul of new anti-avoidance legislation that might negate any tax benefits previously enjoyed.
9. IHT reliefs should be reviewed to ensure that they have not been compromised by new activities or ventures, so avoiding any future unpleasant surprises.
10. Think about the 2015 general election and how this might affect the fiscal landscape. Are there any changes that you could make now that might help to insulate you and your business against any detrimental change?
Catherine Desmond said: "This is by no means an exclusive list. However it is likely that several of these tips will apply to businesses and where appropriate the necessary action should be taken.
"A number of areas such as investment allowances for plant and machinery for example, are time sensitive so, in order to gain the optimum benefit, early consideration should be given to the best way forward."