Osborne’s main points from 18th March for farmers are listed below. It remains to be seen whether his suggestions will be kept with the post-election budget.
Tax
British self-employed farmers can now average out their profits over five years instead of the current two. This is hoped to help with the large tax bills farmers are facing, with the government estimating to potentially save farming £30m a year.
Annual tax returns are to be replaced by digital tax accounts. This should mean less work; certain information will already be shown on the system.
Entrepreneurs’ relief from capital gains tax is to be tightened. There will be new rules on limits disposed of and those where associated business are involved.
The class 2 rate of National Insurance for the self-employed will be scrapped in the next parliament, class 4 contributions on trading profits will be changed to introduce a new benefit test, there will be no NI for under 21s from April and no NI for young apprentices from April 2016.
Fuel duty is to be frozen from September.
Tax on savings will be charged only after the first £1000 of interest or the first £500 for the higher rate taxpayers.
Income tax personal allowance is to rise to £10,800 in 2016-17 and £11,000 the next year.
The higher rate tax threshold has risen to £42,385 in this year and £43,300 in the two following years.
The Pensions Lifetime Allowance on contributions cut by £250,000 to £1m from 6th April 2016.
The VAT registration threshold has been increased from £81,000 to £82,000.
The small business rate relief has been extended for another year to 31st March 2016. Properties with a rateable value of £6,000 or lower get 100% relief and those between £6,001 and £12,000 will get relief of 0%.
Annual investment allowance
Mr Osborne agreed that £25,000 is not an acceptable level to encourage investment in farming. The industry will have to wait until the government’s Autumn Statement to learn the new rate, which was set to drop from January in 2016.
Deeds of variation
These allow a family to alter a will after death to make the distribution of the estate more tax efficient providing all beneficiaries agree to the change. Deeds of variation are to be reviewed in summer 2015.
Enhanced capital allowances
The scheme means that a business can invest in energy-saving machinery that might otherwise be too expensive. Osborne has said that the allowance will be available on a longer list of energy-saving and water-efficient technologies in summer 2015. Currently, this list includes solar thermal equipment, pipe work insulation, boilers, lighting and, combined heat and power.
Compulsory purchase law
The law will be changed to make it clearer, faster and fairer – a popular change.
megrosefisher 