Since I last put pen to paper, or fingers to my keyboard, to consider what has been happening in the rural world, my time has been very much involved in the consultation issued by the Treasury into the taxation of Environmental Management Schemes.
As a committee, we were very keen that the membership had their say on the proposal and, as part of this, we did hold a short webinar to both encourage members to take part and also, we hoped, to give confidence to our membership to make a response.
As part of this process, not only did the ICAEW make a response from the Farming & Rural Business Community supporting the Institute Tax Faculty, but I was privileged to host a meeting of a committee referred to as the ARB. This consists of senior representatives of many rural industry interested bodies, CLA, NFU, CAAV, ALA, CIOT, TFA. This broad industry group shared ideas and proposals they saw affecting their members and clients. Thereby all of us gaining as wide a perspective as possible.
On the day, we were also joined by representatives of the policy making teams of the Treasurer and DEFRA who shared with us more detail on their current thinking. I would praise both parties for their openness and what appeared to be a genuine desire to work with the representative bodies to achieve a suitable outcome for all concerned. It was accepted by all that change will not suit everyone but taxation is a major driver in the decision of the industry to adopt or not adopt DEFRA schemes and, where possible, the Treasury are keen this is not a hurdle.
The response day for the consultation has now passed and it is hoped that we will get initial feedback from the Treasurer in the Autumn, when a further meeting of the ARB should be held to consider these proposals and ensure they are workable in the day-to-day environment.
I also attend the cereal event In Nottinghamshire in early July. Again, this matter was on the lips of many farmers and advisers alike. Many still uncertain which way to go and how far to take up environmental schemes as opposed to crop production.
If one message came out from all the meetings I have had and conversations held, it is that the industry of advisers and rural industries just want certainty to make informed decisions on a farm by farm, rural business by rural business basis.
In the Autumn I hope more clarity on the next stage of this matter will be forthcoming. Our annual conference, as promoted later in this newsletter, is on the 27 & 28 September and, given the excellent rage of speakers, including the Shadow Minister for Environment, Food and Rural Affairs, it will be interesting to see if we have a response by that time and what the various speakers views on the future will be.
Of course, one of the attractions of “income foregone” is that, where farming profitability is volatile, there is an argument in favour of going for the secure option. This may be relevant for those who rely on contractors and hence have machinery costs that are almost wholly variable. Where this is not the case, the decision to embrace SFI may be much more difficult.*The views expressed are the author's and not ICAEW's.