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AND FARMING AGRICULTURE
The Suffolk Show is Back! We talk to its director about this year’s show
Welcome to our Summer 2022 edition of Agriculture and Farming
We’re delighted to launch our Summer 2022 agri newsletter at the Suffolk Show, which is returning for the first time in three years – please come and see us at stand 636! We were able to catch up with Bruce Kerr , Director of the Suffolk Show to see how he views the way the previous two years have affected the sector, and how the Show will be celebrating Her Majesty the Queen’s Platinum Jubilee. The Suffolk Show is just one of the events we’ll be exhibiting at this year, so if you’re unable to get to that, do keep an eye on our social media feeds for news of other events we’ll be attending.
Nick Banks
W hilst this issue focuses on some of the current issues facing the agricultural sector, we’re very pleased to include an interview with Emily Foskett, the creator of Emily Mortimer Jewellery. Regular readers of Adviser may recall that we have followed Emily’s business development story over the past few years, and we are happy to see that lockdowns haven’t held her back as she now has her own jewellery boutique in Woodbridge as well as a thriving digital retail operation. Emily is exhibiting at the Suffolk Show at stand 716. Many farms and estates now include farm shops and cafes to complement their existing activities. On page 8 Ryan Pearcy , SB Digital Director, explains how the management of financial data from these ancillary business locations can be enhanced through modern technology, in order to make use of your retail resources more productively.
Tax remains a key issue for the sector, and a significant change to the tax system will happen next year with the change to Basis Period Reform. This change seeks to align the tax assessment of profit to a fiscal year basis rather than a financial year basis. Tax Advisory Director Chris George and Private Client Director Simon Hurren take you through the changes and explain how to plan ahead. Graham Doubtfire is a Private Client Tax Partner who has acted for farming businesses for more than 25 years, during which time he has supported the transition of assets between one generation and the next and assisted many farming families to understand the tax consequences that could arise. On page 12 he looks at tax reliefs within the sector and why a tax assessment of the business is so important ahead of any challenges from HMRC regarding the status of the business. Our agricultural insurance business team are out and about seeing new and existing clients on site at their farms, but one issue our advisers have repeatedly seen lately is the undervaluation of farm and rural buildings –
which then becomes a problem if a property needs to be rebuilt. If the insured value submitted by the policy holder is inaccurate there is a strong chance their payout will also be less than expected, so it’s advisable to work with your broker to get this correct. Find out more on page 14. Finally, some good news for farmers and estate owners who are thinking about creating new woodland. Chris George , Tax Director, explains on page 3 how this can produce a healthy income stream through Woodland Carbon Units, which in most cases will quickly recoup the initial costs and is tax free, as well as benefitting the environment. Who wouldn’t want to know more about a scheme which is exempt from Income Tax, Corporation Tax and VAT! We hope you enjoy this edition of Agriculture and Farming. If you want to discuss any of the points raised, please get in touch your usual Scrutton Bland contact.
Nick Banks
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Woodland Carbon Units: Green, Tax-Free Income Tax Advisory Director Chris George has some good news for farmers and landowners thinking about creating new woodland.
E very farm and estate has that one area of land that no matter what you try, never produces a yield worthy of the amount of time and effort spent on cropping it. Whether it is because access is difficult, or it is an irregular shape, despite all of your best efforts, the results fail in comparison to the rest of your farming activities. Perhaps it is worth therefore considering something different. A solution that utilises the land effectively, produces a tax-free income stream and benefits the environment all at the same time. Creating a new woodland which meets the standards of the Woodland Carbon Code, will allow the landowner to issue Woodland Carbon Units (WCUs) and Pending Issuance Units (PIUs). These units represent the amount of carbon that will be absorbed by the planted trees during their lifetime. With an increasing number of businesses and government organisations pledging to be net carbon neutral in the near future, many of them need a method whereby they can offset their own carbon emissions. As a result, the number of organisations in the market to purchase WCUs and PIUs is quickly rising.
Typically, a new native woodland captures between 300-400 tonnes of CO2 per hectare by year 50 and 400-500 tonnes by year 100. Recent sales of UK Woodland Carbon Units have produced an income of between £10 and £20 per tonne of CO2. This means a hectare of new woodland can produce an income of between £5,000 and £10,000. Generally, around 70% of the carbon units are sold upfront, providing an immediate income stream which in most cases exceeds the cost of the initial planting. The remaining units are then sold later as the woodland matures. Of course, as the woodland develops, other opportunities for income generation are opened up. These can include timber and wood fuel sales or the granting of felling licences. Another option is utilising sporting rights in the woodland once it has been established. As well as the financial benefits, there are also many social and environmental benefits. In addition to the sequestering of carbon offered by the trees over their lifetime, the woodlands offer benefits to wildlife and biodiversity alongside protecting waterways and soil.
Income and profits from running a commercial woodland, either through the sale of WCUs, PIUs or the sale of timber and wood fuel, is exempt from Income Tax, Corporation Tax and VAT, so all of the profits generated from these activities are kept by the business. This can result in a higher return on investment when compared to undertaking other activities on the land which are subject to tax. However, in order to benefit from the tax exemptions, the woodland needs to be run on a commercial basis. It is therefore important to keep evidence to show that the woodland is being developed with a commercial outlook. As with all diversification, there is no one size fits all approach, and while reforestation of low yielding land may be the right fit in some cases, other options are also available and should also be investigated. Anyone considering taking advantage of Woodland Carbon Units should seek professional advice from their accountant and land agent.
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The Suffolk Show is Back! We spoke to Bruce Kerr , Suffolk Show Director about this year’s event, and what visitors can expect, and how 2022 will be an extra special show thanks to the Queen’s Platinum Jubilee.
We’ve had two years without the show, how do you think the public has reacted to its absence and return? The show has been missed by so many people, and we have had numerous messages of support since taking the decision to cancel back in the Spring of 2020, I think most people are genuinely excited by the show’s return this year and having been incredibly understanding over the last two years. Many businesses have changed and adapted during the pandemic, how has this affected the mix of exhibitors who are attending? The Suffolk Show is the biggest two-day event in the county and the opportunities it offers for face-to-face interactions cannot be substituted. Undoubtedly there will be businesses who have changed the way they operate, as we have had to do here, and there will be some businesses who were here in 2019 who are no longer exhibiting. Equally there are many new ones coming in to replace them.
Have you seen any impact on ticket sales as a result of the pandemic, and have you had to introduce extra measures for visitors, livestock, staff and exhibitors to ensure everyone remains safe? Pre-show ticket sales have exceeded all previous years, so we are anticipating good numbers at the time of writing. We have carefully reviewed our layout and offering to all those attending the show, and made a number of changes, including the introduction of free car parking, much more in the way of contactless transactions, and changes to layout to provide wider avenues, and more space to try to eliminate overcrowding.
2022 is the Queen’s Platinum Jubilee. What is happening to mark the occasion at Trinity Park, and what do you think the lasting legacy of that will be in Suffolk? Back in November 2021, we planted a new Jubilee Avenue of 70 trees to commemorate Her Majesty the Queen’s reign, which will provide us with a lasting legacy here at Trinity Park. At the Show, we have a unique exhibit planned, spread over nearly two acres of the showground, which will demonstrate a huge amount of what has happened within the county during the Monarch’s reign with the help of over 70 different organisations from Suffolk. At the conclusion of events in the Grand Ring on the second day of the Show (Wednesday 1 June) we have a Jubilee Pageant planned, which will involve over 1000 participants from many different organisations based in the County. The Pageant will start with the arrival of the Red Devils British Army Parachute display team, and conclude with the arrival of the Suffolk Torch Relay, which will be received by the Lord Lieutenant of Suffolk at the commencement of the Jubilee celebration weekend.
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It’s well known the livestock industry is facing some serious challenges, particularly with high prices for fuel and feed. What is the SAA doing to assist the agricultural sector to deal with these unprecedented problems? Our livestock exhibitor entries are strong, despite the challenges we are all aware of. It is clear that the industry needs to have a shop window with the consumer, and this is the platform which our Show, as well as many others around the country provide. What is your view of the role that specialist advisers, such as Scrutton Bland’s Business Advisory team can have in helping farmers and managers deal with the economic changes that we are going through? The role of advisers has never been more important. Businesses should engage their advisers, involve them in conversations and ask for their views. There is so much going on in the sector, and business owners have so much to consider, that it is possible to miss things. Your advisers can work with you to ensure you have everything covered.
The mental health of the farming sector has been in the spotlight in the last few years. What’s your view on the importance of the Show in the way it brings the farming community together, and the lasting impact it can have in this area? Without the presence of any livestock markets within Suffolk, I think the Show and the Suffolk Agricultural Association, who organise the Show, provide a valuable focal point for people working in this sector to meet and share not only work experiences, but social interaction. The Association has our own Chaplain, and we also have a close working relationship with the charity YANA who provide direct support to those in the Rural sector. Their details can be found at www.yanahelp.org
With so much change in the farming sector, where are you expecting farmers in the east to focus their attention in the coming months? Personally, I think there is an awful lot of information to digest currently, and with government releasing information on new schemes on a very slow basis, often with limited detail, it is hard to make decisions on a piecemeal basis. There are environmental challenges, particularly around security of water and food, and these are often in conflict with the economic outlook. I think patience is required from farmers, but under the circumstances, the Government, and its many agencies, could do an awful lot to help, by not procrastinating over their support and regulation agendas. What are you personally most looking forward to for the 2022 Suffolk Show? Hopefully two sunny days, and plenty of happy children eating ice creams, and watching the numerous displays and partaking in the free activities across the Showground. Visit www.suffolkshow.co.uk to buy tickets and help plan your day.
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Stylish, sophisticated – and from Suffolk of course! Readers of Adviser magazine will be familiar with Emily Foskett , whose business progress we have followed over the past few years. Her firm Emily
Mortimer Jewellery was created in 2015 and since then has gone from strength to strength, and is now stocked in major department stores such as Fenwick and John Lewis. Her distinctive contemporary designs have been worn by a number of famous faces including Ellie Goulding and Vogue Williams, and last year she opened her first jewellery boutique in Woodbridge. We caught up with Emily to find out about how the Emily Mortimer Jewellery business has grown, and how digital marketing and social media have helped her reach new customers.
We last talked to you in 2019 – how have things been? There has been a lot of change for everyone, but I adapted where I needed to, kept things moving forward and continued to focus on the next steps for EM. In 2019 I was still predominantly an online business and stocking in independent stores, so it has been exciting to see online growth and shopping habits changing. Scrutton Bland have been at integral part of helping me keep up with government funding schemes, support and having a better understanding of my business.
You opened a shop in Woodbridge last year. What was behind that decision and why do you think it’s important to have a presence on the High Street? It was a lockdown decision; I saw the space on a walk, and I knew instantly it was the next step for EM. It was time to expand our online experience and create an office/retail space which was different and that my customers could come and try pieces on and get a real feel for my jewellery. Woodbridge is an amazing place for luxury independent brands and a popular holiday destination, so it just made perfect sense. Having a shop most definitely opens up to a whole host of people who would never have come across my brand otherwise.
Can you say a bit about online sales and how the website has helped to keep sales going through lockdowns? The pandemic has accelerated digital marketing and the way people purchase things. I have really noticed that my customers are prepared to spend more online now. They are still buying gifts for others but are also spending more on gold and diamonds for themselves. Having a clean, fresh and easy-to-use website has been an absolute game charger in terms of growing sales for EM.
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Social media is really important for communicating the image of fashion brands. Can you share some of your secrets for how you manage that? Social media has been incredibly important for us especially Instagram as it opens you up to a huge audience. Often the most important thing I can do is story a new piece of jewellery or show how we would style it. I like to share a good selection of content, from things that inspire me and things I believe in, so it never feels repetitive. Imagery is also essential, if you haven’t got good imagery don’t post, it is as simple as that.
You’ll be going to the Suffolk Show this year for the first time in several years – how do you think that will be? I think it is going to be fantastic! As you say it has been several years since the last show and I’m sure people will be so excited to be back at such a prestigious event. This is the only show I will be taking part in in 2022 so it is big deal for me and remains one of the most important shows I do. I am also stewarding Fifth Avenue this year, so it is going to be a busy few days. It goes without saying it is always amazing to catch up with old customers who come from afar and to share my new designs.
Finally, can you say something about your plans for the future? The success of our shop in Woodbridge has been amazing so I can never say never in terms of opening another, but the location would need to be perfect. Being in a large space by the river has enabled us to have some really fun events this year including my long awaited ‘Piercing party’, so I definitely hope to do more of that in the future. In the meantime, I am always adding new pieces to EM, creating lots of bespoke engagement rings and I have just started designing a new collection. We are going to put a big focus on PR and social media this year and we are on the verge of employing a social media manager to up our social media profile and activity, so let’s just see what happens!
See Emily’s designs at stand 716 at the Suffolk Show or at www.emilymortimer.co.uk
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Farm Shops and Cafes – Financial Management for Retail Enterprises
Many estates now include retail businesses, for example farm shops or cafes/restaurants, and these often require different financial management systems and processes to the core business. Ryan Pearcy , SB Digital Director looks at some of the issues facing farm retail businesses and how modern technology can help resolve these effectively.
The issues Farm shops and café/restaurants often complement existing estate activities. They frequently arise from opportunity and, as a result, controls and processes tend to follow, rather than being designed at the outset. Utilising the right systems can generate additional income effectively, without costing an arm and a leg. Most retail businesses have a till system. Traditionally these were isolated systems, meaning all takings had to be manually copied from the till printouts into the finance system. This way of reconciling takings is so ingrained that HMRC accepts the copying of information from daily till printouts into finance software as a caveat to Making Tax Digital (MTD) compliance. Although this may mean you have an “out” for this aspect of reporting it doesn’t remove the financial admin burden. Not only does the information on the daily takings need to go on to the finance system but this needs to be reconciled against the many different payment methods as they come into the bank, which often don’t tie up. A smart integrated system automatically posts transactions in a way that enables one click reconciliation.
Card payments have become the number one method of paying for goods - a development which accelerated during the pandemic. This has the benefit of reducing the risk of fraud from theft as well as making the retail team more efficient by removing the need to manually “cash up” at the end of a day. It doesn’t remove the risk of error though. Most card payment terminals are not connected to a till which means the value needs to be entered manually, which can introduce errors. To ensure an automated process you would need a modern card payment terminal that integrates into your till system. Most modern till systems will have stock management built in that reduces stock levels as items are purchased. A successful store maximises profits on popular goods whilst selling off slower-selling items at reduced prices. This is only possible with insights on the products themselves, including turnaround time and margins. This is further complicated with perishable goods which are often a key selling area for farm shops. To generate these insights, systems need to not only track stock and sales, but have dashboards and reporting functionality.
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Is there a solution? There are many till systems that have stock tracking, but it is the newer cloud-based ones that have the greatest capability. Given the rural location of most farm shops, installing a cloud based till system has to be weighed up against connectivity restraints. Some of the best cloud system have “Edge” architecture that enables the tills to continue operating if internet connectivity is weak or lost completely. So how do they work? The best systems in this space work on tablet devices, which can be combined with hardware such as cash drawers, enabling staff to serve from a single location or move around the store. These are linked to payment devices via Bluetooth and wi-fi so that as the total is rung through the till, the payment value appears on the payment terminal. This prevents errors in processing as well as supporting multiple payment types. Stock values are updated in real time and can be synced across multiple locations or till points. Sales and stock information is then updated into the finance system daily to sync with payment deposits from the payment gateways, enabling one click reconciliations as well as compliance with Making Tax Digital’s digital links. Dashboards are always available for management to see what is occurring in real time in their shops, cafes and restaurants from any location.
In conclusion All of this is possible when you select the most appropriate system for your needs and configure it in the right way. When sales are processed automatically the finance team can then focus on expense management as well as assessing what is and isn’t successful in your retail premises. But with any change of system comes the challenge of change management and the impact on the team. Processes will need to be adapted, training undertaken and support secured. Getting this right can transform how you and your team work, and enable you to use your retail resources more productively.
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Basis Period Reform: Planning is Key
Business Advisory Directors Chris George and Simon Hurren explain a forthcoming change to Income Tax regulations which may affect many agricultural businesses. With many farmers running their businesses through partnerships or as sole traders, changes to the basis period rules, due to take effect from 6 April 2023, could lead to large tax liabilities in some cases.
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What are the changes? Each year self-employed individuals and members of partnerships are charged Income Tax on the profits arising from their business activities. Ordinarily HMRC tax the profits arising in the accounting period ending within the tax year. However, these rules can be complex, especially in the opening years of a business. It can also lead to a time-lag between profits being earned and when tax is due. In the example above, tax won’t be paid on the profits for the period from 1 July 2021-30 June 2022 until 31 January 2024. The changes will take place in the 2023/24 tax year and this can lead to farmers paying tax on more than 12 months of profit in one tax year. This is because an individual will be taxed on their normal accounting year basis as well as the period following the end of the accounting year to the 31 March/5 April 2024. For a partnership with a June year end, in the 2023/24 year the partners would be taxed on the year to 30 June 2023 as well as the profits for the period from 1 July 2023 to 31 March 2024. This is effectively taxing 21 months’ worth of profits in one year. Any ‘overlap’ profits generated in the past, due to basis period overlapping and being taxed on the same profit for than once will be offset, however in many cases these are much lower than current profit levels. Take an example of a partner who has an annual profit share of £80,000 and the partnership accounts are drawn up to 30 June. The overlap profits brought forward are £10,000. The tax payable in the 2022/23 and 2023/24 tax years would be as follows:
Planning is Key Given the changes do not take affect until the 2023/24 tax year, there are still opportunities to undertake some planning in order to reduce the impact of the changes. While loss relief may be able to help, with many businesses having suffered COVID related losses in recent years, in many cases any available losses have already been utilised to produce much needed tax savings. Similarly, averaging could be beneficial to assist with changeable profits, especially with the impact of the reduction in subsidies. Expenditure However, the one key area where the most reduction can be achieved is by businesses ensuring that discretionary expenditure is maximised in the affected year. This will be the accounting period which ends in the 2023/24 tax year as well as the period to 31 March 2024. So, if a business is anticipating spending significant amounts on repairs or new capital items either delaying them or bringing them forward so that they fall within the affected period will be beneficial. With capital expenditure that is acquired on Hire Purchase, the key date for tax relief is when it is available for use by the business. This is usually when it is delivered to the business premises. With significant lead times being seen across all items of agricultural machinery, it may be that decisions need to be taken in the near future to ensure that the tax allowances are available in the correct period. Change of year end Whilst the changes take effect from 2023/24, it could be beneficial to change the partnership end prior to the changes taking place, particularly for if there is expected to be lower profitability. By changing the year end early, it would not be possible to spread any additional tax over five years as the case can be under the transitional rules, so it is important to only consider this option in low profit years. Forecast While manipulating expenditure will be useful in minimising the impact of the reforms, there is still likely to be additional tax liabilities in the year of the change. It is therefore vital that robust cash flow and profit forecasts are prepared so that tax liabilities can be estimated accurately, and businesses can plan for this additional tax. At Scrutton Bland, our team can help with forecasting for these additional tax liabilities and suggest planning opportunities that will assist in lowering the amount of tax due. We can also discuss the options in terms of incorporation of the business and other alternative structures.
2022/23
2023/24
Profit
Profit
Year ended 30 June 2022
£80,000
Year ended 30 June 2023 Period from 1 July 2023 – 31 March 2024
£80,000
£60,000
Overlap profit
-£10,000
Total
£130,000
Tax & National Insurance
£24,702
Tax & National Insurance
£51,355
In this transition year, the tax liability has more than doubled, with additional tax of over £26,600. This can present huge challenges to cash flow and a significant reduction in cash available for drawings. To assist with this, individuals will be permitted to spread this additional tax over a 5 year period. However, as shown in this example, this will still mean £5,330 of additional tax being payable in each of the following five years.
The changes affect a self-employed sole trader in the same way.
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When is a farm not a farm? When the status of a farm as a business is challenged by HMRC it is often too late to make any
changes that could have prevented a substantial tax liability arising, says Graham Doubtfire , Private Client Tax Partner. Such events often occur when looking at capital taxes, particularly Inheritance Tax arising on death but to a lesser extent Capital Gains Tax, and the matter that has triggered the tax liability will already have occurred.
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F or many farming families it is likely that a claim for Inheritance Tax reliefs has previously been made since it was introduced in 1984. But in recent years many farming businesses have diversified into activities that complement the arable or livestock business. This diversification has often been carried out over a period of time without regard to the cumulative impact on the Inheritance Tax reliefs available, and whether the business remains a trading business or an investment business. Consider the example of an arable farm that was passed down to the current generation in perhaps the 1990s or early 2000s. The components of the farm business will now look very different, possibly incorporating let properties (cottages or commercial buildings), energy generation (solar panels or wind turbines), the provision of storage facilities or other activities associated with the land including the provision of camping facilities and events like festivals or weddings. The Inheritance Tax legislation has changed little since it was introduced in 1984 and Agricultural Property Relief and Business Property Relief remain very valuable protections against Inheritance Tax when assets are passed onto the next generation, either in lifetime or on death. In contrast there have been numerous tax cases regarding the interpretation of this legislation, and the more diverse the non-agricultural activities are (particularly if they are non-trading) the greater the exposure to the loss of some or all of these reliefs becomes. The structure of the farming business, whether that be as a Sole Trader, a Partnership or a Company will determine both the Reliefs available and the rate of Relief. How the business is managed can also be critical to the success of an Inheritance Tax Relief claim. This was demonstrated in the 2010 Earl of Balfour case where a substantial number of cottages that were let on short-term leases qualified for Business Property Relief, due to the way in which the business was conducted.
This tax case is now over 10 years old and the precedents that were set out in that case have been accepted by HMRC, despite them being able to change the relevant tax legislation should they have wished to do so. The business structures used by most (but not all) farming families, mean that it is normal for the Agricultural Value to be protected from Inheritance Tax by Agricultural Property Relief, but in order to protect other assets, that often form a substantial value part of the Estate, it is necessary to rely on the principles set out in the Earl of Balfour case in order to claim Business Property Relief. With agricultural values stagnating, and in some cases reducing from where they were a few years ago, and the values of other assets increasing, it is becoming ever more important to ensure that Business Property Relief is not compromised by any number of factors outside of the control of the farmer. There are strategies in lifetime that farming families can adopt to protect themselves from these risks, particularly where a claim is to be made on death. This could include the structure of the business and how the Will is written (particularly on first death). It is therefore vitally important that farming families assess the risks to the loss of Inheritance Tax Reliefs and work alongside both their Tax Advisers and Solicitors to ensure that the maximum protections are put in place to ensure that these risks are managed, and a plan is agreed to ensure that when they are tested there is a robust strategy to weather any storm that might be created by HMRC. Graham Doubtfire specialises in looking after Private Clients and their families and has acted for farming businesses for more than 25 years, during which time he has supported the transition of assets between one generation and the next and assisted many farming families to understand the tax consequences that could arise. Despite the risks of a challenge to claims to Inheritance Tax Reliefs, the current tax legislation (Income Tax, Capital Gains Tax and Inheritance Tax) is broadly supportive of farming businesses and now is therefore a good time to undertake a thorough assessment. Any future changes, should they arise, are likely to make planning for the farming family more challenging.
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The rising costs of rebuilding – and the dangers of undervaluation
David Taylor , Insurance Executive, highlights the importance of making sure that farm buildings are correctly valued for insurance purposes, and the dangers of underinsurance when it comes to rebuilding agricultural properties.
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I t’s not exactly news that the price of that demand for building materials such as concrete, steel, timber, cement, plastics and roofing tiles has vastly outstripped supply – and prices have risen accordingly. All this has meant that the rebuild costs of farm buildings has increased by 25% or more over the past two years, but many farmers have not taken this into consideration when renewing their policies. building materials has spiralled over the past couple of years. Disruption to supply chains, a shortage of shipping containers and rocketing fuel prices have all meant Pre-pandemic, the rebuild costs for farm buildings used to rise steadily by about 3% a year, but the events of the past two years have thrown the ‘indexation’ figures, which are used to calculate insurance costs, into turmoil. And while insurers use index-linked polices which are formulated to consider the increases in building costs, the amount paid out on a claim will depend on the value of the building(s) being insured being correct in the first place. How will this affect my claim? The consequences of undervaluing the rebuild costs of a building could be significant, as the policy holder could find themselves falling foul of averaging clauses. This means that the claimant will receive a proportion of the declared value of the item or property that has been insured. This is fine if the item in question has been correctly valued, but in the event of a claim on an underinsured building, the claimant will only receive a percentage of the claim, since they have only paid that percentage of the premium due on the policy. For example: The roof of a large barn has collapsed and needs to be replaced. This will cost the farmer £40,000 to repair. The barn is insured for £100,000, but in fact the barn’s realistic rebuild value is £200,000. This means that the insurer will only pay out £20,000, or 50% of the farmer’s claim, since they (the policy holder) have underinsured the rebuild cost of the barn and only paid 50% of the premium they should have.
The solution to this is to reappraise the rebuild prices of farm buildings to ensure that the increases in building costs have been taken into consideration – and to do this ahead of renewing farm building insurance. It is the policy holder’s responsibility to ensure that the insurance sums are correct, and we recommend that a surveyor is used. As insurance brokers we can assist and advise, but we cannot accept responsibility for the accuracy of the insured values declared by the policy holder. What should be included when calculating the rebuilding cost Your broker can help with advice on insurance for rebuilding farm and/or agricultural properties, but these will usually include the following elements:
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Debris removal and any works to the site including environmental clean-up costs
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The main structure of the building ie walls, floors and roof
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Fences, hedges, walls and gates which affect or relate to the building (these can sometimes be insured under farm contents)
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Fixtures and fittings within the building
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Small buildings and structures which pertain to the main building, such as footpaths, drives, yards and forecourts
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Service equipment such as plumbing and lifting apparatus, belts, pipes and cabling
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External equipment such as water tanks and solar panels, fire escapes and gangways.
What shouldn’t be included in calculating rebuild costs
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Grain silos, fertiliser and fuel tanks should all be specified separately
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Outbuildings used for domestic purposes such as garages and utility rooms – these should be included in home buildings insurance
Please don’t hesitate to contact us if you are unsure about the farm building cover you have in place, and we will be happy to advise you. We have a long-standing association with the agricultural sector and understand the opportunities and challenges facing our farming clients.
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Meet the Team We have a long-standing association with the agriculture sector and our specialists have a thorough understanding of the opportunities and challenges facing the industry.
We seek to build long-term, trusted relationships with our clients. It is important to us that we understand our clients’ business and personal aims and objectives, in order that we can provide bespoke and personal advice.
Get in touch with a member of the team to see how they can help you.
Nick Banks Business Advisory and Cloud Accounting Partner nick.banks @scruttonbland.co.uk 01473 945762 James Tucker Business Advisory and Cloud Accounting Partner james.tucker @scruttonbland.co.uk 01473 945761 Jason Fayers Managing Partner and Tax Partner jason.fayers @scruttonbland.co.uk 01473 945817 Graham Doubtfire Private Client Tax Partner graham.d oubtfire @scruttonbland.co.uk 01206 417267
Ed Nottingham Insurance Director edward.nottingham @scruttonbland.co.uk 01379 773532
Janice Bush Business Advisory Manager janice.bush @scruttonbland.co.uk 01206 417209 Sonja Lambourne Client Manager sonja.lambourne @scrutttonblnd.co.uk 01473 945768 David Taylor Commercial Account Executive david.taylor @scruttonbland.co.uk 01473 945748 Emily Pinner Business Advisory Account Executive emily.pinner@ scruttonbland.co.uk 01473 945770
Jack Deal Business Advisory Director jack.deal @scruttonbland.co.uk 01473 945786
Chris George Tax Advisory Director chris.george @scruttonbland.co.uk 01473 945836
Ryan Pearcy SB Digital Director ryan.pearcy@ scruttonbland.co.uk 01206 417218
Gavin Birchall Tax Partner gavin.birchall @scruttonbland.co.uk 01206 417277
Jo Gilbert Business Advisory Manager jo.gilbert @scruttonbland.co.uk 01473 945765
Clare Thorpe Senior Client Support clare.thorpe@ scruttonbland.co.uk 01473 945772
0330 058 6559 scruttonbland.co.uk
@scruttonbland
Scrutton Bland Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Our FCA registered number is 828934. 0734/05/2022/MKTG
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