NEWS LETTER

Collective Machinery Sale offers Tax Relief Opportunity

Moore Allen & Innocent’s Annual Collective Sale of farm machinery, to be held at Southrop Airfield on Wednesday March 28th 2012, offers vendors & buyers alike a last opportunity to benefit before changes to the tax relief available for capital investment in machinery & plant takes effect in April.

Currently, an annual investment allowance (AIA) is available which means that businesses can claim 100 % relief against taxable profits on the first £ 100,000 invested in plant & equipment & certain other capital items. However, from April 6th 2012 (April 1st 2012 for limited companies), the £ 100,000 annual allowance is set to reduce drastically to £ 25,000.

Commenting on the changes, Auctioneer Peter Kirby said ‘Our end of March Collective Machinery Auction offers vendors a last chance to cash in on the currently strong trade for tidy second-hand farm machinery before the April reduction in the annual allowance.’ Collective sale entry forms are enclosed with this update or available online at mooreallen.co.uk.

Purchasers with an end of March or April 5th accounting period who have not exceeded the current £ 100,000 annual allowance will be given a last chance to invest in machinery & plant & claim 100 % relief against taxable profits as capital expenditure is treated as being incurred on the date that the obligation to pay becomes unconditional.  However, care needs to be taken where machinery is purchased ‘out of season’ to be used in a later period in an attempt to claim allowances in the earlier year (for example the purchase of a combine pre-year end, say March 2012, where the asset cannot be used until the following harvest & any allowances will not be available until the year ended April 5th 2013 – when the AIA will have reduced significantly).

If you are considering major sales or investment in plant & machinery then Moore Allen & Innocent can provide specialist advice on all aspects of the management of farms & estates including estate & tax planning & estate & farm improvement schemes.  For further information on how we can assist you, contact Paul Oughton on 01285 648 113 or email:  farmmanagement@mooreallen.co.uk

Changes to Cross Compliance & Nitrate Vulnerable Zones Rules

The circulation of the recent guide to cross compliance 2012 has seen the introduction of a new measure, GAEC 19, which extends some of the current NVZ requirements across agricultural land outside of the Zone.

The new requirement relates to the spreading of manure near to surface water, springs & boreholes, as well as the requirement to produce & keep a map of your holding showing all surface waters on your holding & land within 10 metres of them; all springs, wells & boreholes on your holding, & within 50 metres of the boundary of your holding, & land within 50 metres of them.

Other changes just to the NVZ rules include a reduction of N application to grassland from 330kg N/ha to 300kg N/ha, whilst the assumed crop available N% from slurry has been increased, which generally means that less manufactured fertiliser can be applied to grassland.

Should you require any further information on these changes or any aspect of cross compliance, contact a member of the Moore Allen & Innocent Agricultural Team on 01285 648 107.

Single Payment Scheme Entitlement Opportunities – Act Now

We currently have several lots of Single Payment Scheme Entitlements available for sale & demand for more.

The EU has proposed the abolition of existing Entitlements, before allocating entirely new Entitlements which will not be linked to existing ones. At the moment this idea remains a proposal, as does the changeover date to the new system, which might be in 2013, but may be postponed until 2014 or 2015 but, if you hold more Entitlements than you have eligible land area, it is sensible to consider selling the surplus Entitlements to release capital.

For the latest information on the Entitlement trading process & values, contact Stuart Milsom or Gemma Dalton on 01285 648 107.

Permanent Pasture & the Single Farm Payment

Under the current Single Payment regime there is a national limit on the amount of permanent pasture that can be ‘converted’ into arable land. The present rules state that if the ratio of permanent pasture to total agricultural area declines by more than 5 % from the 2005 base level, there will be an automatic requirement for the RPA to provide consent for the conversion (it is not automatic at present). In addition, if the ratio declines by more than 10 % then farmers will be asked to reinstate pasture on a last-out first back in basis.

This has never been a real issue before, but in 2011 the 5 % trigger was missed by only 72,000 hectares, which is less than 2 % of the total grassland area. With the CAP reform proposals focussing again on greening & permanent pasture, there is an increasing risk that a trigger will be activated, & rules relating to cultivating pasture being tightened considerably.

Catchment Sensitive Farming comes to the North Cotswolds

The Catchment Sensitive Farming (CSF) project is being extended to include the North Cotswolds catchment of the River Thames as well as changes to the capital grant scheme available in this & 49 other ‘priority areas’.

The CSF project provides free advice & targeted grant aid towards capital projects with the aim of reducing diffuse water pollution from agriculture. There is a range of eligible capital items such as for watercourse fencing, pesticide loading & wash down areas, as well as roofing for manure stores. A maximum grant rate of 50% up to £ 10,000 per holding is available dependent on the specific capital item. New items eligible within this year’s scheme include biofilters & fencing alongside livestock tracks. The 2012 scheme is open for applications between March 1st & April 30th

The Capital Grant Scheme is a competitive scheme & therefore securing an agreement is not guaranteed & acceptance also depends on the quality of all applications. If the total amount of grant applied for by all applicants exceeds the available budget, grants will be allocated to those applications which best meet the scheme’s priorities, are within a target area & which deliver the greatest environmental benefit.

There will be Natural England run workshops covering this new catchment area & grant scheme at Condicote Village Hall on February 28th & the RAC on March 8th – with further information available from ourselves or Natural England.

Buildings, Grain, Fertiliser & Other Insurance Values Are you Covered ?

Given the appreciable rise in commodity prices over recent years together with the more recent catch up of input prices, it would be prudent to review insurance policies to ensure adequate cover is in place, both for the contents & also the storage buildings. Fertiliser in particular has not only risen significantly in price in the past year but also in many cases, the time that it is stored on farm before use has lengthened due to early movement discounts & changes in credit availability.

One other note on fertiliser is to remind Clients of the requirement to notify the local Fire Brigade where more than 25 tonnes of nitrogen fertiliser is stored on any one site & also the Health & Safety Executive if the quantity exceeds 150 tonnes. As well as appropriate warning signs on buildings the same notification procedure applies when the quantity stored either changes or reduces below the relevant thresholds.

Moore Allen & Innocent is approved by the RICS to handle insurance business including advice on choosing policies, obtaining quotes & liaising with insurers. Our Agricultural Team is qualified to carry out insurance valuations of both agricultural & residential properties, as well as live & deadstock & advising on claims.

If you have any concerns about the cover you currently have in place & would value impartial advice, contact a member of the Agricultural Team on 01285 648 107

Rural Economy Grant To Launch Later This Month

Defra has announced a new Rural Economy Grant to be launched with up to £ 60 million of grants available for micro & small businesses to ‘boost farm competiveness, & support significant growth in the agri-food, rural tourism, forestry, renewable energy, & other high-potential (eg ICT & creative) sectors’.

Available from the end of February as part of the Rural Development Programme for England (RDPE), the new scheme will sit alongside the existing Farming & Forestry Improvement Scheme (FFIS) launched in November to assist farming, forestry & horticultural businesses in England to become more efficient at using resources via the provision of grants between £ 2,500 & £ 25,000 up to a maximum of 40 % grant.

Further details of the these schemes & opportunities are available from the Moore Allen & Innocent Agricultural Team on 01285 648 107

Last Orders for the Campaign for the Farmed Environment

The final Defra CFE postal survey will be dropping through the letterboxes of 5,500 randomly chosen farmers in the next couple of weeks & campaign organisers are urging recipients to complete & return the form in a final effort to demonstrate to Defra the measures being undertaken voluntarily by farmers to protect & enhance the environment without the need for further compulsory measures.

The survey will be sent to farmers who have more than 10 Ha. of arable land, although if you have received a survey form in previous years you will not receive one this February.

One target of the survey is to monitor the progress being made towards increasing the area of land managed voluntarily by 50,000 Ha. Farmers will be asked if they have put any land into unpaid environmental management e.g. outside of ELS and/or HLS, or what cultivatable land has been voluntarily left out of production. Further information is available on the campaign website: www.cfeonline.org.uk & will also be included for reference with the survey.

For clear, objective and professional advice on these or any other agricultural and rural estate issues please contact one of our Agricultural Team:

Robert Young ~ Mark Hill ~ Christopher Graham ~ Paul Oughton ~ Brian Smith
Peter Kirby ~ Stuart Milsom ~ Margaret Bush ~ Gemma Dalton ~ Amy Herring

Tel. 01285 648 113                                                             Fax. 01285 640 494    

This newsletter is produced for guidance only and should not be used as a substitute for professional advice. Accordingly no liability or responsibility for any loss or damage can be accepted by Moore Allen & Innocent or other contributors as a result of any person, company or other organisation acting or refraining from acting upon comment on this newsletter.

• Farm & Estate Management • Sales & Purchases of Rural Properties • Valuations • Estate Planning •
• Landlord & Tenant • Farming Agreements • Auctions • Compensation & Compulsory Purchase •
• Farm Buildings • Expert Witness • Planning & Development • Grants & Quotas • Agri-Environment •
• Woodland • Digital Mapping • Diversification • Employment • Payroll & Accounts •

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