Farm summit hears of tax fears

CORMADDIE Farm just north of Dumfries was the venue for a farming summit organised by Shadow Farming Minister Robbie Moore and Dumfries and Galloway MP John Cooper.

It followed the Budget in which hoped-for changes to agriculture and business tax reliefs did not happen.

The changes which will now come in next April have sent a chill through the farming community, stopping investment and making people query whether the farming game is still worth the effort.

John said: "Trouble is, farms are asset rich and cash poor.

Take the example of a farm worth £5m. With an inheritance tax allowance of £3m, you will be liable for tax on remaining £2m – a bill of £400,000.

"Many farms produce a return on capital of about one per cent, so that’s an income of £50,000 per year.

"You have to settle the tax bill using that, and of course you already pay income tax on that £50k. And you have to live, too.

"It means many will have to look at selling off part of the farm – which might make the whole thing unviable – or selling up and getting out."

He warns thousands of farms across Dumfries and Galloway will be hammered, and is concerned the changes threaten the UK’s food security.

Mr Cooper added: "The Treasury claim the changes affect only the richest estates. I think they’ve got that wrong.

"Today’s average farm size and land value means many small to medium-sized family farms, not just vast estates, will be caught up.

"It all shows a complete lack of understanding of farming and its economic realities."

The summit, hosted by Dumfries Councillor Graham Bell and featuring farming and agricultural figures will help Robbie Moore 'formulate a plan of attack' and press for a rethink of policies.