The Rural Development Programme for England is inviting outline applications for a grant aimed specifically at the dairy industry. The Dairy Fund is open to all dairy farm businesses who want to establish, develop or expand co-operative structures with an aim of strengthening member’s connections to their markets.

The main activities attracting support from the grant focus on the new formulation or expansion of existing co-operation structures in the dairy industry, which will create jobs, strengthen partnerships within the industry and promote value added projects within co-operation businesses.

Eligible projects could be funded upwards from 25,000 up to approximately 1 million with some projects attracting 100% of the eligible costs. The RDPE are reminding potential applicants that all outline applications have to be submitted by Thursday 28^th February 2013.

If you are a dairy enterprise who are looking to form a co-operative, or indeed are looking to expand an already formed co-operation business within the dairy industry then please contact us to discuss eligible projects.

In view of the extreme cold weather coupled with recent heavy snow and rainfall Natural England are reminding agreement holders that they are offering a temporary lift in some of the land management requirements that will be impacted due to the extreme weather. They are also offering derogations where the establishment of some options may be delayed due to the weather.

In the event of further snow falls Natural England will relax restrictions on carrying out supplementary feeding on land under agri environment options. This will be a temporary lift for the duration of any severe cold weather period and as such it will not be necessary to apply for a derogation in this instance.

Natural England’s advice in relation to supplementary feeding is that wherever possible land not under agri environment schemes should be used, however if it is necessary, during snow, to supplementary feed on land under agri environment schemes then Natural England offer the following advice to reduce and limit damage to any environmental features.

• Supplementary feeding areas should be moved whenever possible;
• Any leftover forage should be completely removed to reduce damage to the sward after the snow has thawed;
• Feeding on archaeological features should be avoided;
• On moorland and common land, where landowners restrict the practice of supplementary feeding, graziers should consider whether to inform them of their intention to feed during this period of adverse weather;
• Supplementary feeding may continue for four days after the snow has cleared if the ground remains frozen. It should cease once the ground thaws
• Farmers on SSSI-designated land should contact their Natural England adviser before undertaking supplementary feeding.

As flooding also still remains a problem, any agreements holders who will be delayed in the establishment of any agri environmental options will need to apply for a derogation. To discuss the right derogation needed please contact us to discuss your requirements.

It has emerged that DEFRA are in the process of conducting a review into the Soil Protection Review process and record keeping together with a broader review of soil management requirements. This is in light of the recent weather where many farmers, despite best efforts to protect soils, have endured some damage and loss through significant wet weather.

The rules currently do not penalise SPS claimants for soil damage or loss if they have recorded it correctly in their Soil Protection Review 2010 booklet. Conversely a claimant who has gone to great effort to protect their soil by managing it through the adverse weather but has failed to record it in the review booklet will, under the current rules, face a minimum 5% cross compliance penalty.

We will wait to see if any amendments are made to the Soil Protection Review recording requirements, however In the meantime, and in view of the current rules, please ensure your Soil Protection Review 2010 booklet is fully up to date. If you would like any further advice or assistance with completing your Soil Protection Reviews then please contact us on 01952 727007.

No one can avoid death and taxes but if you could reduce your Inheritance Tax (IHT) bill, you would, wouldn’t you? Do not assume that your farm qualifies for full inheritance tax relief just because your will is up to date. Failing to plan for IHT can leave not only a sizeable tax bill, but in the worst case scenarios, force a family to sell property that has been in the family for generations. Therefore, seek professional advice about different tax planning scenarios early on.

When you die, inheritance tax is charged on the value of your estate at 0% on the first £325,000, and at 40% on the rest including any cash, but there are certain reliefs that reduce the charge, including Agricultural Property Relief (APR).

APR reduces the value of agricultural property charged to inheritance tax by 100% in the case of a farm that you “occupy for the purposes of agriculture” yourself. If for instance, a lifestyle farmer occupied the farmhouse, could the executors convince HMRC that he “occupied” his farm “for the purposes of agriculture”? If so, then there may be no IHT to pay on the value of the land and the farmhouse. However, if there are let cottages, land, farm buildings etc and they are not occupied for the purposes of agriculture, then there is likely to be an IHT problem because they are not within the remit of any APR or potentially Business Property Relief (BPR).

Reliefs against inheritance tax are an important part of succession planning for farmers as they allow the maximum amount of assets to pass to the next generation. But there are several complicated qualifications that have to first be met to gain full APR.

In order to qualify for APR the law says the farmhouse must be “of a character appropriate” to the land being farmed, so a Georgian manor house on 10 acres of cabbages is not going to work. The question of how “appropriate” the farmhouse is should be decided by considering; size of property to the amount of land being farmed, layout of the house and would an “educated rural layman” look at it and say “that’s a farmhouse”, or would he say “what a magnificent country house” – this is known in the trade as “the elephant test” (hard to describe, but you know one when you see one).

You may still not get full relief for the value of the farmhouse because APR only applies to the “agricultural value” of the property. Some farmhouses have a “tie”, meaning they can only be occupied by someone who makes their living from farming, and this reduces their value somewhat. APR is only due on that reduced value so the difference in value between the “tied” value and the normal open market value does not qualify for APR.

The RPA have recently sent out a list of changes to the cross compliance rules ‘‘Summary of Changes for 2013’’. Whilst there are no major changes, with the majority of the rules remaining the same, we would recommend that everyone reads the changes and keeps a copy with their 2012 guidance. The changes include some minor standard changes and amendments to wording with no new regulations being introduced.

The RPA will not be issuing a new cross compliance guidance booklet for 2013 because keeping the ‘Summary of Changes for 2013’ with the 2012 booklet is sufficient. However a new updated 2013 booklet is available through the RPA website to download electronically if required.

The changes do not include any changes to NVZs and ‘no spread zones’, however due to the proposed changes to the Nitrate Pollution Prevention Regulations 2008, the RPA are likely to announce changes to the standards later in the year. In the meantime the RPA have advised all claimants to follow the 2012 guidance for NVZs and ‘no spread zones’.

Please ensure you are up to date with the various changes by reading through the summary and keeping a copy with your guidance. If you would like any further details or would like to discuss how the changes affect you then please contact us on 01952 727007.

Entitlements are now required to meet an increasing demand therefore those wishing to sell entitlements should contact us.

Please be aware that the deadline for entitlement transfer is the 2nd April 2013.

Alternatively if you are looking to purchase entitlements then please contact us 01952 727007 as soon as possible to discuss your requirements.

Please see the Entitlement Trading section of our website for entitlements we currently have available for purchase or call 01952 727007.

Please click on the link below to access our recent Newsletter which includes useful updates on key issues.

Newsletter – December 2012

The Chancellor, George Osbourne, yesterday delivered the Autumn Statement and as expected measures to counteract the gloomy economic forecast are set to be implemented over the coming months.

Farmers however do have some good news on the horizon in the form of the Annual Investment Allowance increasing giving a tax relief on any plant and machinery investments from January 2013 which should provide some relief over the two year period it is set to run for. This combined with a 1% cut in Corporation tax, an extended Small Business Rate Relief and an increase in the threshold for Income Tax should provide some relief for farming businesses as we look towards the New Year.

The key points summarised from the budget include;

• Annual Investment Allowance limit increase from £25,000 to £250,000 for qualifying investment in plant and machinery from January 2013 for a period of two years.

• Small Business Rate Relief extended for a further 12 months starting from April 2013

• Newly built empty commercial properties completed between 1^st October 2013 and 30^th September 2016 will now be exempt from empty property rates for the first 18 months

• The proposed 3p on fuel duty due in January 2013 is cancelled

• A new approach to Income Tax for those who are self employed or in partnerships will allow a calculation of profits on a cash basis without distinguishing between revenue and capital.

• The personal allowance for Income Tax will be increased to £9,440 from April 2013

• The higher rate (40%) threshold for Income Tax will also be increased by 1% in 2014/15 and will again increase by a further 1% in 2015/16.

• CGT annual allowance will also increase by the same – 1% in 2014/15 and a further 1% in 2015/16

• IHT Nil Rate Band will increase 1% in the 2015/16 to £329,000

• The Corporation Rate will, as planned, fall to 23% from April 2013 and will fall again to 24% in April 2014. For small companies the rate remains unchanged at 20%.

If you need any advice concerning this budget announcement and its impact on your rural business then please do contact us.