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Hidden Inheritance Tax pitfalls for farming businesses

It is dangerous to assume that 100% Agricultural Property Relief (APR) or Business Property Relief (BPR) will apply to every asset that is passed on in a modern farming business. There are many cases where HMRC has argued that part of a farming business is chargeable to Inheritance Tax (IHT).

3 common VAT mistakes farmers can avoid

In order to avoid HMRC penalties it is important to record expenses and claim VAT correctly for your farm business. Genuine mistakes do happen but there are some things to bear in mind that will help minimise the chance of triggering an inspection.

What are the tax issues around grass letting, grazing licences and contract farming?

Asking someone who has lived and worked on the same farm for most of their life whether they are a farmer can provoke a puzzled look. However, where the farmer is now doing less work on a daily basis and a neighbour is grazing the land, HMRC may argue that you are no longer an active farmer.

Compulsory purchase of land and Capital Gains Tax

Farmers and landowners who lose land under a Compulsory Purchase Order for a new road scheme have many things to consider, including Capital Gains Tax, and legal or valuation issues. 

Should I set up a trust?

Trusts have become something of a political football in recent years and their use is often called into question with the implication that by putting a trust in place, the motives for doing so, are driven by tax avoidance and the wish to be not transparent about the ownership of the assets.

Farming and environmental land management – the tax issues

Armstrong Watson has just submitted its response to a recent HMRC consultation on the taxation of land entered into various environmental schemes.

Avoid the VAT issues for new dwellings on farms

The shortage of affordable properties in many rural areas, means more farming businesses are looking at building new properties or converting buildings to provide accommodation for family members or workers. But what about the VAT issues that can arise?

Careful timing needed to claim capital allowances for assets on hire purchase

When buying farm machinery on hire purchase, care needs to be taken with the timing. Once the asset is brought into use for the purposes of the trade, you are treated as having incurred all the capital expenditure even though you will be paying off the finance over several years. 

Reminder that new penalty regime for VAT will hit farmers

Farmers who submit late VAT returns or miss their payment deadlines could now be fined £200.

The Budget 2023 –  changes to tax relief of capital expenditure

While there was little of real interest for farmers in the Spring Budget, there was a big announcement regarding tax relief known as “full expensing”, which will offer some businesses more tax relief when purchasing machinery and equipment.

To replace the super deduction tax relief, companies will be able to claim 100% relief on qualifying capital expenditure, such as IT equipment and plant and machinery, without any cap for the next 3 years.