Spring Budget for Farmers

This article was correct at the time of publication. The rules referred to apply until 6th April 2026, at which point the changes announced in the Autumn Budget 2024 will come into effect. Early advice should be sought on the impact of those changes on your personal and business circumstances.

 

What was the impact for those in the farming community of the Spring Budget 2024? Mike Bracegirdle, head of Agriculture and Rural Affairs, highlights the key points and their implications.

Agricultural Property Relief and Environmental Land Management Schemes

The Spring Budget brought positive news for farm businesses regarding Agricultural Property Relief (APR). Many landowning farmers were concerned that changes may have been made to the Inheritance Tax regimes, the majority of which date back to 2007.

However, the Chancellor announced an extension to the existing scope of APR. From April 2025 APR will be available on all Environmental Land Management Schemes (ELMs). This includes the Sustainable Farming Incentive, Countryside Stewardship and other stewardship schemes and Landscape Recovery, as well as England Woodland Creation offer and other similar schemes.

This announcement supports the belief held by many agricultural advisors that the Government prioritises meeting environmental targets over food production targets. The NFU has welcomed the extension of APR to land in ELMs but considers that “the extension of is beyond ELMs may have an adverse impact on food production and farm tenancies” (NFU President Tom Bradshaw).

Holiday Lettings

Disappointingly, for those farmers who have sought to diversify into furnished holiday lettings (FHL), the news was less favourable. The Chancellor confirmed that the tax reliefs for FHL would be abolished from April 2025, the intention being to increase the number of properties available for longer term lets.

This poses a problem for many farmers who capitalised on redundant brick buildings which do not meet modern farming requirements but make excellent holiday accommodation, as well as creating additional jobs in the rural economy.

Other changes

The Chancellor’s budget reduced National Insurance contributions for both employees and the self-employed by 2p, reformed child benefits and proposed a British ISA, the former assisting both the smaller and larger farming enterprises.

How can Butcher & Barlow assist?

Given the “deep freeze” on tax thresholds is to continue until 2028, it has become even more important for landowners and farmers to consider both their succession and tax planning for the future. With the average age of a farmer in the UK being 59, and the majority of farms being family owned, this planning takes on added significance.

Succession planning entails more than just drafting a will; it involves a comprehensive review of farm ownership, ensuring that the appropriate business structure is in place to optimise efficiency and minimise the tax burden; putting in hand Lasting Powers of Attorney in the event a family member loses capacity; and preparing a well-considered Will to prevent dispute amongst family members which could impact the viability of the family farm.

As part of your business and personal support team, we recognise the importance of fully understanding both your current business and your future goals. We are more than happy to arrange meetings at your farm, alongside your Accountant or Family Advisor, to explore what is best for you, your family and your business.

Tim Bailey, Mike Bracegirdle and Ben Davenport-Lawton from our Agriculture and Rural Affairs team can be contacted for an initial discussion, providing tailored advice and guidance to ensure your interests are safeguarded for generations to come.

 

Contact 01606 334309 or email agriculture@butcher-barlow.co.uk