scruttonbland.co.uk
AND FARMING AGRICULTURE
Finding Treasure on Your Land Digging Into Agriculture Apps Changes to Farm Support Schemes
Contents
3 Welcome to our Summer 2023 edition of Agriculture and Farming
12 From Field to Property:
Exploring Tax Reliefs for Farm Equipment and Property Maintenance
4 Finders Keepers? What to do if you find treasure on your land
14 Digging into Agriculture Apps: The Latest Farming Tools
6 Farming Heritage in Bury St Edmunds
16 The Letter You Most Dread: A Tax Investigation!
10 Sowing Success:
UK’s Farm Support Schemes Changing the Game
18 North Essex Farm Cluster
20 Meet the Team
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Welcome to our Summer 2023 edition of Agriculture and Farming
We’re delighted to launch our Summer 2023 agricultural newsletter. This summer will see us getting back into the swing of shows, seminars, business breakfasts and events, so please keep a look out on our website and social media feed for the latest news on where we’ll be attending.
W hilst this issue focuses on some of the current issues facing the agricultural sector, we always like to look at some of the more unusual cases we have been working on. Graham Doubtfire, Private Client Tax Partner, has a Suffolk farming client who had an unusual situation when they found a hoard of gold coins on their land. On page 4, Graham digs into the legal definition of treasure, what landowners need to do when it is discovered, and whether tax needs to be paid on any rewards that are awarded. Diminishing subsidies and grant payments remains a key issue for the agricultural sector. On page 10, Nick Banks, Business Advisory Partner and Head of Agriculture looks at the current support schemes for farm businesses and examines the transition to new policies which will replace them. We know that the Harvest Year (HY)21 and HY22 results have been strong because of the situation in Ukraine and resultant commodity prices, and this has masked the impact of the reducing subsidy. However, HY23 could see a squeeze on margin with higher input costs and softening commodity prices. The backdrop of this is escalating interest rates and those farm businesses with significant debt could
experience cashflow challenges so need to be on the front foot with their business and financial plans. Tax will always be a major topic for every business, and the fear of not having filed your tax returns correctly can be a significant cause of stress. Whilst we strongly recommend that businesses have their VAT processes reviewed by independent and professional tax advisers on a regular basis, there may still be a day when the dreaded letter arrives from HMRC announcing a tax investigation. On page 16, Chris George, Tax Advisory Partner explains what to do in this situation, and how his team were recently able to help a client go from a demand for many thousands of pounds to a tax rebate. Finally I’m very pleased to announce the opening of our new office in Bury St Edmunds. We have many agricultural clients in the west of our region and it makes perfect sense to set up an office in a location that is easier for them to visit. On page 6, Jack Deal, Business Advisory Partner has been looking at the farming heritage of the Bury St Edmunds area and will be pleased to welcome you to the new office at The Long Barn, Fornham Business Court, Fornham St Martin, Bury St Edmunds IP31 1SL.
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.
James Tucker Business Advisory Partner
James Tucker
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Finders Keepers? What to do if you find treasure on your land What is defined as treasure? What do you do if you find it on your land? And do you need to pay tax on any rewards that you are given? Graham Doubtfire, Private Client Tax Partner, needed to brush up on some unusual tax legislation when one of his clients found gold coins on their land.
Valuing the Find Once the Finds Liaison Officer or local museum curator has examined the find they will write a report which then goes to the coroner who will hold an inquest. Museums have the opportunity to acquire treasure, and finds are valued by an independent expert committee (the Treasures Valuation Committee). A reward, equal to the full market value of the treasure will be divided between the finder, the landowner and/ or the occupier, unless you made a different agreement. If the find was made as a result of an archaeological dig, the volunteers and archaeologists are not entitled to any reward. If the finder acted in bad faith, for example through trespassing on your land or trying to conceal what they found, they are very unlikely to receive anything. We Found Gold! Andrew and Jude Blois who run the Hinton Estate near Southwold really did find a hoard of gold coins on their land in 2018. Andrew commented: “As far as metal detecting goes, I think it is about as exciting as it gets; finding gold! The coins are around 2,000 years old and some of them are the only recorded examples of their type; it is apparently one of the most diverse finds of its type. The coins originate from all over East Anglia; why they ended up in field near Blythburgh I doubt we will ever know.”
Firstly, let’s look at the official definition of treasure. The term ‘treasure’ is defined by the 1996 Treasure Act as:
3. any object which would have been treasure trove if found before 24 September 1997. In practice the only recent finds which would have fallen within this category but not within category 1 have been hoards of gold and silver coins less than 300 years old;
1. any object at least 300 years old when found which:
• is not a coin but has metallic content of which at least 10 per cent by weight is precious metal (ie gold or silver); • when found, is one of at least two coins in the same find which are at least 300 years old at that time and have that percentage of precious metal; or • when found, is one of at least ten coins in the same find which are at least 300 years old at that time; 2. any object at least 200 years old when found which belongs to a class designated by the Secretary of State. At the time of writing, a prehistoric object (other than a coin) any part of which is of precious metal and prehistoric objects (other than coins) any part of which is of other metal provided there are two or more in the same find have been designated as treasure;
4. any object which, when found, is part of the same find as:
• an object within categories (1), (2) or (3) above, found at the same time or earlier; or
• an object found earlier which would be within categories (1) or (2) above if it had been found at the same time. So if you dig up historic objects on your land, the first thing to do is to confirm whether they fall within the definition above. You must report all finds of treasure to your local coroner either within 14 days after the day it was discovered or within 14 days after you realised the find might be treasure. Your local Finds Liaison Officer ( www.finds.org.uk ) can help you in determining whether a find constitutes potential treasure and can report the find to the coroner on your behalf. Failure to report a find of treasure can land you with an unlimited fine, a custodial sentence of up to three months, or both.
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Top and bottom: a selection of coins found on the Hinton Estate.
Middle: Jude and Andrew Blois at Halesworth Museum where the treasure is now on display.
Jude adds: “We have an arrangement with a local metal detectorist who we know to be careful and responsible; he’s also a tennis coach and an electrician, so he’s a man of many talents! He is the only person we allow to detect on our land, and anyone else who wants to search has to work under his supervision. The coins that he found were declared as treasure by the Suffolk Coroner and retained by the Crown. They have now been acquired by Halesworth Museum, and a reward was given which was split between us as the landowners, and the finder of the hoard.” We have had several other exciting finds on the estate, including Stone Age flints, and a hoard of metal castings from a Bronze Age foundry which is still going through the coroner’s court. But these discoveries are obviously assets, even though we had no idea of their value when they were found. So we got in touch with Scrutton Bland for some advice!” What are the Tax Implications for Treasure? Graham Doubtfire, Private Client Tax Partner has been dealing with this rather unusual case and explains when tax needs to be paid. “On the basis that the items found are defined as treasure within the definition above, they are subject to tax as follows.
Where the treasure found is retained by the Crown, ex gratia rewards paid have no tax consequences. The rewards are pure gifts of cash and are not chargeable to Capital Gains Tax. However, where the treasure is not retained by the Crown, the Crown’s title is disclaimed and the treasure is returned, the subsequent disposal of this is subject to Capital Gains Tax (or CGT). The base cost of the treasure for CGT purposes is the market value of the treasure on the date of the gift by the Crown. What this means in most cases is that unless there is a significant time interval between the treasure not being retained and it being sold, we would need to include the proceeds received (and the cost would be the same amount as that would be assumed to be the market value of the treasure on the date of the gift by the Crown). In the case of the treasure found on the Hinton Estate, the Partnership Tax Return reflected the fact that the income from the reward they were paid by the Crown was non-taxable and this then flowed through to their Personal Tax Returns as a reduced non-taxable Partners Profit Share.
This was a fascinating piece of work, and we very much enjoy being challenged by unusual cases which require a slightly different approach to usual. Our Private Client tax team has an in-depth knowledge of personal tax matters, which enables us to provide specialist assistance to high-net-worth clients, even if you don’t have gold coins buried on your land!” To speak to a member of the team please call 0330 058 6559 or emails hello@scruttonbland.co.uk
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Farming Heritage in Bury St Edmunds We are delighted to announce the opening of our new office in Bury St Edmunds.
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Y ou can find us in the The Long Barn, at Fornham Business Court, on the north side of Bury St Edmunds. Fornham Business Court is a development of heritage farm buildings, set in beautiful farm surroundings, strategically located beside the A14. The new office is the next step in our journey as we grow our team and client base in the west of our region. To mark the opening of our new Bury St Edmunds office, Jack Deal, Business Advisory Partner celebrates the rich history of agriculture in the area. Readers will be familiar with Bury St Edmunds’ modern agricultural landscape. Local farmers grow significant volumes of sugar beet, onions, and potatoes, alongside wheat, barley and rapeseed. The town has grown rapidly in recent years, with large new housing and commercial developments providing land sale opportunities to landowners. The area remains relatively unsaturated and has seen small numbers of farm diversifications, including event venues, farm shops and café/restaurants, overnight accommodation, storage and renewables.
There is plenty of evidence of agricultural activity in Bury St Edmunds in prehistoric times, and during the Roman occupation of Britain agricultural practices expanded with the cultivation of wheat, barley, oats and vegetables, along with raising cattle, sheep and pigs. After the Romans departed, 5th century Anglo-Saxon settlers continued to cultivate crops and raise livestock, and this history is celebrated at the Anglo-Saxon Museum at West Stow. By the medieval period Bury St Edmunds was a thriving market town and traditional markets are still held on Wednesdays and Saturdays, along with regular farmers markets in the town centre. The Benedictine Abbey owned vast areas of local land which were largely occupied by tenant farmers. This period re-shaped the agricultural landscape, with the introduction of the three-field system and the origins of crop rotations. Bury St Edmunds faced serious challenges during the 16th and 17th centuries. The dissolution of the monasteries by King Henry VIII in the 1530’s led to the dismantling of the abbey and the redistribution of its lands. The enclosures movement started in the early 1600’s, meant that much common land was privatised, resulting in smaller plots of land for individual farmers and that, added to the
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upheavals of the Civil War, resulted in meagre returns for many local tenant farmers.
impact of contemporary farming practices on future generations, but is now doing so with the environment and climate crises in mind. Back in Bury St Edmunds, the late 20th century saw the growth of the local poultry industry and the area is now home to many broiler sheds and poultry operations. Drive around the countryside and you will also still see many active pig operations, despite the hit the industry has taken in the last 12-18 months with high feed prices and issues with labour availability. The farmland around the town remains within one of the driest areas of the UK, requiring many landowners to instal irrigation on their land. This has allowed the cultivation of high value crops such as onions and potatoes, and local farmers are regular suppliers to large supermarket and restaurant chains across the UK. Bury St Edmunds has famously been home to a sugar processing plant since 1924 and the iconic sugar silos, built in 1972, make it one the largest of its kind in Europe. Suffolk is also home to one of the UK’s largest maltings, and sugar beet and barley are a mainstay of local farm rotations as a result. Today, agriculture in Bury St Edmunds remains an essential part of the local economy and a vibrant element of the region’s character. Local farmers continue to diversify the range of crops and activities, and there are numerous examples of high-quality rural enterprises. Bury St Edmunds is a town with agriculture and a country lifestyle at its heart, and we are delighted to open our office to further establish ourselves within the agricultural community of the region. The Scrutton Bland Bury St Edmunds office is located in the The Long Barn, Fornham Business Park, Fornham Business Court, The Drift, Fornham St Martin, Bury St Edmunds, IP31 1SL. To get in touch with a member of the team please call 01284 412690 The Bury St Edmunds team will be holding an office launch later in the month and anyone interested in attending should reach out to the Scrutton Bland events team by emailing events@scruttonbland.co.uk
The Industrial Revolution totally changed the outlook for heavily farmed areas such as Bury St Edmunds. The introduction of new farming equipment, such as the seed drill and improved ploughs, increased agricultural efficiency and productivity. Increased mechanisation in the 19th century meant crop rotation methods were further refined, leading to higher crop yields. This period also saw the development of local agricultural societies and institutions that promoted innovation and knowledge sharing among farmers. Bury St Edmunds has strong links with both the Suffolk Agricultural Association and South Suffolk Agricultural Association, and our new Bury St Edmunds office is just a short drive from the South Suffolk Showground at Ampton. Steam-powered engines and machinery revolutionised farming practices, increasing efficiencies and making them less labour- intensive. Farmers adopted machinery like reapers, threshers, binders and steam engines, transforming the agricultural landscape and increasing productivity. It’s interesting to draw parallels to modern farming practices here. Whilst the machinery used today is unrecognisable from the 19th century, it still requires human skills to operate it, although with the advent of advanced Artificial Intelligence, farmers are now adapting to machinery that requires less and less human intervention. Today’s Bury St Edmunds is home to many third or fourth generation farmers and it was during the 20th century, within periods of great agricultural, economic and social change, that their grandparents and great grandparents first took ownership of their farms. This family heritage plays an important role in the mind set of local farmers, many of whom are proud custodians of their land with emotional as well as economic ties to the area. Land is relatively hard to acquire locally, and this, along with the availability of rollover money, is reflected in the prices paid in recent transactions. The 20th century saw widespread adoption of technically advanced machinery and modern farming practices, and the widespread use of fertilisers, pesticides, and hybrid seeds. It is interesting to reflect on how these practices were embraced and celebrated in previous generations and compare this to the current emergence of regenerative farming and a move away from soil disruption and certain intensive farming techniques. Agriculture as an industry has always had to consider the
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Sowing Success: UK’s Farm Support Schemes Changing the Game
For decades the UK took part in the EU’s Common Agricultural Policy (CAP) and by 2019 was receiving around £4.7 billion of CAP funding. Around 80% of this was provided as ‘direct payments’ under the Basic Payment Scheme (BPS) based broadly on how much land was farmed. A further tranche of CAP money was spent on rural and environmental programmes such as England’s Countryside Stewardship (CS) scheme.
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A ll this changed with Brexit. Since the UK formally left the European Union at the end of 2020, the Agriculture Act 2020 has been passed, enabling the Government to develop very different approaches to supporting agriculture in the future. Whilst they have guaranteed the current annual support budget to farmers every year since then, this arrangement will end in 2024, and that money will then be allocated in different ways. CAP-style direct payments will be phased out, and payments to incentivise farmers and land managers to look after and improve the environment will be introduced. These changes will take place over a seven-year ‘Agricultural Transition’ period running from 2021-28. 2023 is the last year in which BPS will be paid. From 2024 to 2027, delinked payments will be paid each year. Farmers will receive payments based on their BPS payments in 2020-22, provided they are eligible for and claim BPS for the 2023 scheme year. Delinked payments rules will not require farmers to hold land or continue to farm. The House of Commons Library briefing on the Agriculture Act 2020 sets out more detailed information on the policy aims of the new funding framework. For future updates on farm schemes it may be useful to look at Defra’s farm blog which provides a rolling update on the latest developments. What are the new schemes? Defra is gradually introducing new schemes under the provisions of the Agriculture Act 2020. The main part is known as Environmental Land Management (ELM), which has three main elements, which are being introduced in stages: • In 2022, all farmers who were at that time paid Basic Payment Scheme (BPS) funds could apply for funding under a new Sustainable Farming Incentive scheme. • A Local Nature Recovery scheme will be introduced to replace the Countryside Stewardship scheme. It will pay for locally targeted work to create space for nature alongside food production. Examples of funded actions are managing and creating habitats as well as adding trees or hedgerows to fields. • Finally, Landscape Recovery programmes will focus on large-scale, long-term, significant habitat restoration and land use change.
The Countryside Stewardship (CS) scheme set up under the CAP remains open while these new environmental schemes are being phased in, and the last new CS schemes will start in January 2024. Farmers may apply for a new environmental scheme whilst also receiving CS payments, provided the same land is not claimed for twice. Separately, funding will also be provided for productivity improvements and innovation on farms. Other schemes to support animal health and welfare improvements for example are also being developed – follow the Defra farm blog for more details.
What about the views of farmers and other stakeholders?
Farm representatives and green groups have broadly supported the replacement of the CAP system of paying farm subsidies based on the area farmed and instead paying farmers to provide publicly beneficial programmes such as environmental improvements. However, farmers and agricultural producers continue to express their deep concern that food production was not included in the Government’s list of purposes for which funding could be provided. Farmers have also expressed worries about implementation of the new approaches. There is particular unease around the timescales for the new measures to be implemented and the extent to which the new schemes will provide farmers with enough support. Defra has been criticised by the Public Account Committee for their “blind optimism” over the schemes’ introduction, and insufficient detail on how the schemes will compensate for the end of current funding systems. One thing that can be agreed on by both farmers and the Government is that the claims processes and IT systems support need to be simple and effective. The former CAP scheme had complex application and compliance processes which caused problems for farmers, added to which the Rural Payments Agency’s record for processing claims was widely criticised for many years. At Scrutton Bland we know from our farming clients that they have many questions about how to manage the financial and administrative aspects of their agricultural enterprises. Our agriculture specialists have a deep understanding of the challenges facing this sector, and will work with you to understand your business, and to determine whether there are opportunities to help you achieve your aims and objectives. To get in touch with Nick Banks, our Agricultural and rural team lead, or to speak with another member of the team, please call 0300 058 6559 or email hello@scruttonbland.co.uk
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From Field to Property: Exploring Tax Reliefs for Farm Equipment and Property Maintenance
In the current high inflation environment with increasing tax
rates, escalating machinery costs and a squeeze on
profitability, it is more important than ever to maximise the amount tax relief available on the purchase of new equipment.
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C apital Allowances are generally available on the purchase of new, qualifying equipment. The Capital Allowances regime undergoes almost annual changes to the rates, types of relief available and nature of qualifying equipment. This was the case in the most recent March Budget where the Chancellor announced a new ‘full expensing’ regime to apply to companies from 1 April 2023. Summarised below are the allowances which are available to businesses from 1 April 2023. Full Expensing (companies only) The full expensing regime replaced the temporary super deduction allowances which were available to companies up to 31 March 2023. Under full expensing, companies are able to obtain a 100% year-one deduction on the cost of any new plant and machinery acquired in the period from April 2023 to March 2026, excluding cars. This is regardless of whether the company spends £50,000 or £50 million in that period. With the increase in Corporation Tax rates to 25%, this relief can be incredibly valuable to companies who have high capital expenditure costs. However, with the current £1 million level of Annual Investment Allowance (see below), this full expensing will only have real benefit to those businesses spending more than £1 million per year on capital items. As well as the 100% rate for plant and machinery assets, under full expensing ‘special rate’ assets, such as electrical, heating and water systems, will benefit from a 50% first year allowance. This could be of great benefit to companies who are expanding their business premises or acquiring new buildings. One further point to note is that when an asset is sold and full expensing has been claimed previously, the amount of the disposal proceeds is brought into charge to Corporation Tax in full. Under previous regimes the proceeds would have been deducted from the Capital Allowance pool balance and not charged to Corporation Tax in many cases. This could therefore bring forward tax charges for businesses who regularly replace capital assets. Annual Investment Allowance (AIA) This 100% relief has been in place now since 2008 and in that time the amount of the allowance has yo-yoed between £25,000 and £1 million. The £1 million figure is now a ‘permanent’ figure for the foreseeable future (or until we have a change of government!). Annual Investment Allowance is available to all businesses including sole traders, partnerships, LLPs and companies, however, as has been the case for a number of years, it is not available to partnerships where any member is either a company or trust. The Annual Investment Allowance is also split between businesses controlled by the same person.
The allowance can be used to provide 100% relief on expenditure relating to any item of plant and machinery (except cars) as well as special rate items. Unlike with full expensing, the assets acquired do not have to be new and unused and given the high level of the allowance, this will more than cover all qualifying capital additions in any given year. Structures and Buildings Allowance (SBA) Expenditure on new buildings and structures does not qualify for either full expensing or the Annual Investment Allowance. Instead, costs incurred on the structure of a building or other items such as fencing, bridges and tunnels can qualify for an annual Structures and Buildings Allowance at a rate of 3%. Broadly, this allowance is available to any type of business. Repairs v Capital While Capital Allowances are a very valuable source of tax relief for businesses, generally they are not applicable to expenditure on residential properties unless they are qualifying furnished holiday let properties or properties which are solely used by employees (such as farm workers’ accommodation). With the upcoming Energy Performance Certificate (EPC) regulation changes for let properties, a large number of businesses who have some rental properties are having to incur significant amounts of expenditure to bring such properties up to an EPC rating of at least ‘C’. Given that is it likely that the vast majority of these properties will not benefit from Capital Allowances, it is necessary to consider what element of the works can be classed as repairs and what constitutes capital improvement. HMRC’s view is that a repair is classified where alterations are made to properties which is merely replacing part of the property with its modern equivalent. So, for example, replacing old, single glazed wooden windows with modern, energy efficient, double glazed PVC windows is likely to qualify as a repair with full tax relief being given in the year of expenditure. However, where the works offer some kind of appreciable improvement to the property, this will be classed as capital expenditure with no tax relief available until the property is sold. This includes adding insulation where none existed previously. As with all significant expenditure, it is vital that specialist advice is sought as early as possible so that any planning can be undertaken before it is too late. If you would like to get in touch to discuss the tax reliefs available to you, whether you are investing in machinery or buildings, please speak to Chris George, by emailing hello@scruttonbland.co.uk or calling 0330 058 6559.
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Digging into Agriculture Apps: The Latest Farming Tools
As the agricultural sector becomes increasingly reliant on up-to-date and accurate data, navigating a path through the maze of digital options is undoubtedly a time-consuming job. Ryan Pearcy, Associate Partner, runs the SB Digital service at Scrutton Bland and looks at how software can help agricultural businesses, outlining some of the digital tools which can help farmers and landowners.
I n recent years the farming sector has had to adopt new ways of gathering and analysing data, not just in relation to equipment, but also in crop and livestock management. We know from working closely with our agri clients that many are seeing the benefits of using digital technology when managing their business accounts. However, the problem is that so many farmers are just too busy, or not properly informed about the other tools which are available to them. As a result, understanding what software is available, and which versions are needed to achieve an optimum result is becoming a painstaking task for many agricultural business owners. One of the most common questions I hear from clients is ‘Where do I even start?’. With an ever- expanding range for software options available, getting it wrong can lead to costly mistakes. But, in reality the transition from a traditional paper based or desktop business processes can be easier than you’d think. Most of us are already using a wide range of apps and cloud- based software in our personal lives without even thinking twice about it; from online
banking to social media, we are all managing cloud-based data already.
time now in cloud accounting packages and so the logical next step has been for software developers to start to create apps which are tailored for specific business sectors, but which will all feed back into one data source. There are currently thousands of cloud-based applications available, which is a lot for a business owner or financial director to have to wade through on their own! By using the services of a cloud software specialists, such as our SB Digital team, you will save a huge amount of time and money and have the peace of mind in knowing that the system you have chosen is the best fit for your business and is compliant. We always listen to our clients and the overwhelming message from people working in agriculture was that whilst many of them want to engage more with digital technology, they just don’t have enough hours in the day. Our answer to this is to work with you, talking through your business needs in order to help you work out which software packages you would most benefit from, based on the data you need to gather and report on and any other
Of course, many agricultural businesses have already adopted accounting systems and are starting to see the benefits of having live data, accessible 24/7. From a professional advisers point of view, having access to live data can help us to better manage our clients’ finances and gives us the oversight we need to be able to recommend future actions. For clients themselves, there are some very immediate benefits from being able to send invoices out and getting paid faster, through to being able to prepare accurate reports in order to support applications for lending. Where we see the next big development is in the add-on style apps which can integrate into packages such as Xero and which are tailored to specific sectors or business types. Most software now operates with an open application programming interface (API). This isn’t as scary as it sounds. In short, APIs allow software developers to write programmes which allow other pieces of software or apps to talk to each other. APIs have been in use for some
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APPROVALMAX A customisable approval tool that works alongside Dext to digitise the approval process for purchase orders and invoices, allowing the wider team to approve transactions wherever they are. RE-LEASED A useful piece of property management software which alerts you to key dates such as rent reviews, lease renewals and so on, as well as reminders for maintenance, inspection and compliance tasks. If you are unsure where to start with your digital journey, or maybe are already managing your data in the cloud but would like to find out more about the apps available you can contact the SB Digital advisory team on 0330 058 6559 or email hello@scruttonbland.co.uk to find out more.
software packages you need to interface with.
finding ways to be more efficient and produce accurate reports.
The next stage in the advisory process is for the SB Digital team to produce a data map for you, which shows you how your data currently flows between all the systems you use. This enables us to provide you with an independent and easy-to-understand assessment of where your systems can be improved and to suggest the software, and in particular any add-on apps, that will help you do this. The final part is the conversion process to install the new software and to assist you in transitioning your data to the cloud. We know from extensive experience that the first three months after a new software package is in place is the crucial timeframe to ensure that your system is operating efficiently, so we will work alongside you to assist and advise should you need support. We know from speaking to our clients that some agricultural businesses don’t think this kind of thing is relevant to them, but farming and agri businesses are often the forefront of technical development, particularly around
I’d suggest any operation with a turnover between £500k and £20 million should be looking for professional advice, although smaller businesses may well also benefit. We have also created several case studies about some of the recent work the SB Digital have been carrying out with businesses throughout the UK. Please reach out to us if you would like to be sent some to view or visit our website www.scruttonbland.co.uk/case-studies/ There is a wide range of apps available which have been developed specifically to help agricultural businesses manage their accounts. Here are some of the software systems we regularly recommend to our agri clients: DEXT (previously known as Receipt Bank) An easy and efficient way to keep on top of your expenses with one tap. Just photograph your receipts on your phone or smart device and Dext will extract the data and post in directly into your accounts.
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The Letter You Most Dread: A Tax Investigation!
Chris George, Tax Advisory Partner, looks at how a tax investigation can impact a business, and ways that you can protect yourself, should the worst happen if HMRC come knocking.
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What prompts HMRC to investigate a business? HMRC can open a tax investigation into any business, at any time. You can have completed every form and ticked every box, and they can still decide to scrutinise your Tax Return, VAT Return or any submission made to HMRC, and afterwards send you a tax demand that you were not prepared for and may not have the funds to meet. What should you do if HMRC announce they will be inspecting your organisation? Your first call should be to a professional tax adviser who specialises in the area of tax being investigated and also has experience in dealing with HMRC investigations. Several of our tax team have worked for HMRC in the past and have many years of experience in dealing with their demands. Tax investigations can be difficult and stressful, and a good tax adviser will be able to offer support and advice and will work with you to help you manage what can be a challenging situation for all concerned.
Points to bear in mind:
• Our tax team have professional experience and knowledge of HMRC’s practices and methods and can understand some of the most complex aspects of their regulations
• A tax investigation is often a lengthy process – the case study above took two years to complete
• To mitigate the risk of any opaque data or non- compliant methods being uncovered by HMRC we strongly recommend that businesses have their tax affairs regularly reviewed by independent and professional tax advisers Take pre-emptive action If the thought of having a tax investigation opened into your business is causing you any concern, you may want to consider protecting your business by taking out tax investigation insurance. Tax investigations can be lengthy, time-consuming, and expensive, and they can happen to anyone - even if you’ve done everything by the book. With tax investigation insurance, you’ll have peace of mind knowing that you’re covered in the event of an HMRC investigation.
A recent case study:
• The client – a large educational not-for-profit organisation
• The background – in March 2020 (just as Covid was taking hold!) HMRC sent a letter to the client announcing they would be carrying out a VAT inspection • The call – the client immediately contacted Scrutton Bland’s tax team to ask for advice on what to do next • Our response – our tax team stepped in to deal with the situation: examining the client’s VAT records, and gathering information, checking that everything was in order, and predicting some of the things that HMRC would want to know • Next steps – we then contacted HMRC to ask questions about their investigation, negotiate with them on the information that was needed and timescales to provide this data • The tax demand – HMRC carried out their inspection, then made a tax demand for the high tens of thousands of pounds • Our strategy – we didn’t accept the HMRC verdict and challenged their findings, providing evidence to rigorously refute their claims • The result – the client went from having a demand for tens of thousands of pounds, to receiving a tax rebate of £7k.
Tax investigation insurance covers the cost of professional fees associated with an HMRC investigation, including:
• Our fees for handling the investigation on your behalf
• Any fees for outside experts or legal counsel we may need to hire
• Expenses incurred for attending meetings and preparing documents
By taking out tax investigation insurance, you’ll be protected against unexpected expenses and can be rest assured that you’ll receive expert guidance and support throughout the entire process. Please note that the Tax Investigation Insurance outlined in this article is only available to clients of Scrutton Bland LLP. However, the Tax team are able to act on your behalf to deal with HMRC tax investigations should you receive a letter and want to engage specialists to act on your behalf. We have been advising clients with tax issues relating to agriculture, farming and land management for many years, and our knowledge and experience helps us to understand the kind of tax issues they face. If you have a query or would like to talk about Tax Investigation Insurance further, please get in touch by emailing hello@scruttonbland.co.uk or by giving us a call on 0330 058 6559.
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North Essex Farm Cluster
Farm Clusters are a growing mechanism for farmers and landowners to work collaboratively for the benefit of their individual farm businesses.
T he new North Essex Farm Cluster was launched last November and sits within the Blackwater River Catchment (which incorporates the Rivers Pant, Blackwater and Brain as well as smaller streams) and covers around 56,000 hectares stretching from Saffron Walden to Maldon via Braintree. The Cluster involves landowners and farmers coming together to exchange knowledge and experience, working together at scale, looking at how they can enhance water and soil quality and exploring new markets for farmers through improving biodiversity and sequestering carbon on their land.
The group has secured initial funding from Essex County Council, the Environment Agency, Essex and Suffolk Water, Anglian Water and the RSPB. The Farm Cluster’s coordinators, husband and wife team Emma and Joe Gray, are farmers themselves within the catchment and see that as a key factor in taking the Cluster forward. Cluster coordinator, Emma Gray, explained “The North Essex Farm Cluster is run by farmers, for farmers, and that is going to be key to achieving success. As farmers ourselves, we understand the pressures that farm businesses are under, but we also know how proud farmers are of the landscape they farm in and that they want to do their absolute best to look after it. The Farm Cluster will support farms to protect and enhance the natural environment, while delivering environmental gains that wider society will benefit from. It’s vital that farmers can do this in a way that is compatible with running a profitable farm business, so the Cluster will have a role in advocating for farmers to ensure that changes to farming practice are sustainable.
By working collaboratively, farmers are able to work at scale across a number of holdings, aggregating environmental benefits. The cluster will serve as a single point of contact for businesses and organisations wanting to engage with farmers, and will identify where projects can be connected for greater environmental outcomes.” Following a launch event late last year, the cluster has run a series of events for its members, including a Winter Bird Day, looking at stewardship options aimed at supporting farmland birds through the winter months and a Water Resources day, exploring how farmers and landowners can act now to prepare their farm business for a future where rainfall is becoming unpredictable and scarce. The group also has a strong advocacy role, taking the views of farmers on the ground and relaying them through consultations with Defra and NGOs, giving valuable, independent farmer-led feedback on issues affecting the development of agricultural and food policy.
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Cluster coordinator, Joe Gray, commented: “It’s great to see so many farmers coming forward to be part of the North Essex Farm Cluster, it really highlights the appetite that farmers have for working together and embracing new opportunities. Now we have a core group of farmers that are interested in being part of the cluster, we are out and about in the Cluster area, visiting farms and identifying opportunities for projects and collaborative working. This could involve new habitats being created, from hedgerows to wetlands, or the improvement of existing habitats and soil through regen-ag approaches, with the aim of connecting a corridor of good practice through the Cluster.” In April, Scrutton Bland became sponsors of the North Essex Farm Cluster and will be supporting the Cluster with accountancy services. James Tucker, Business Advisory Partner explained: “Scrutton Bland have been supporting farmers and the wider rural economy in Essex and Suffolk for over 100 years, and throughout that time our focus has always been very much on the future. In a
period of change for agriculture and the natural world we are delighted to be supporting the North Essex Farm Cluster in its important work to create a sustainable and wildlife friendly environment for farming in North Essex”
The North Essex Farm Cluster is currently open to new members. For more information on their work or to find out how to become part of the Cluster, please contact Emma & Joe Gray at info@northessexfarmcluster.co.uk
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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.doubtfire @scruttonbland.co.uk 01206 417267 Simon Hurren Private Client Tax Associate Partner simon.hurren @scruttonbland.co.uk 01473 945822
Ed Nottingham Insurance Director edward.nottingham @scruttonbland.co.uk 01379 773532 Jack Deal Business Advisory Partner jack.deal @scruttonbland.co.uk 01473 945786 Chris George Tax Advisory Partner chris.george @scruttonbland.co.uk 01473 945836 Ryan Pearcy SB Digital Associate Partner ryan.pearcy@ scruttonbland.co.uk 01206 417218 Jo Gilbert Client Manager jo.gilbert @scruttonbland.co.uk 01473 945765
Janice Bush Client Manager janice.bush @scruttonbland.co.uk 01206 417209 Sonja Lambourne Client Manager sonja.lambourne @scrutttonbland.co.uk 01473 945768 David Taylor Commercial Account Executive david.taylor @scruttonbland.co.uk 01473 945748 Emily Pinner Client Manager emily.pinner@ scruttonbland.co.uk 01473 945770 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. 0773/05/MKTG/2023
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