June 23, 2023
Article
The staged removal of the Basic Payment Scheme is resulting in farming businesses feeling a squeeze on their bottom line. The 2023 claim will see a minimum 35% reduction in income from their 2020 claim. This is making most farming businesses explore other options.
In practice, we are seeing most of our clients do this via Countryside Stewardship agreements.
Latest application window opens for 2024 Countryside Stewardship agreements - GOV.UK (www.gov.uk)
We have seen a mixture of practical examples. Some are in the extreme of putting hundreds of acres of farmland into permanent grassland and others are selecting small areas of unproductive farmland to be converted into wildflower meadows or herbal lays.
This income is useful in rebuilding and in some cases growing the bottom line of farming businesses, albeit it doesn’t suit all businesses.
There is also a push on farming businesses to help offset the carbon and other pollutants of their operations and within other industries. This can be done through intermediaries like the Environment Bank or direct with businesses. This private sector can be very lucrative but needs careful thought and consideration.
As always, it is useful when making any big changes to your business income to discuss the tax implications with your accountant.