The budget this week has seen nothing but bad news for farmers and landowners across the country; but I wanted to take this opportunity to highlight some of the points that have come out of it that have been less talked about.
De-linked Basic Payments:
As you know, all past Basic Payment Claimants are now in the phase of receiving de-linked payments. The recent budget announced that there is going to be a significant reduction to these payments going forwards. The previous government had set out a schedule of reductions as follows (for average payments of less than £30000):
2025 - 50% reduction
2026 - 65% reduction
2027 – 80% reduction
2028 – first year of no payment
The labour government have decided to reduce these payments even faster, with any business claiming with an original value under £30,000 to receive a 76% reduction for 2025 and any business who were originally claiming over £30,000 to have the delinked payment cap set at £30,000. There is no word yet on when these payments will come through, or whether the payment will be split into two instalments as in previous years.
There has been no announcement about whether any further de-linked payments will be made beyond 2025 and considering the drastic reduction for 2025, I would suspect and plan for no payment in 2026.
Carbon Tax
This is one to be aware of, although it is not scheduled to come into effect until 1st January 2027. This tax will be introduced by the UK Carbon Border Adjustment Mechanism (Cbam). It will apply to all imported fertiliser, with initial indications suggesting that this would increase the price of fertiliser by a minimum of £50/t. This tax would be paid quarterly in arrears, adding to the financial strain of already tight margins. A similar tax is being considered in the EU, but this is due to be phased in over several years, reducing the competitive advantage of UK farmers from the introduction date.
We have all heard about the changes to Agricultural and Business Property Relief that came as such a shock to the whole agricultural community, having only been mentioned as a possibility in the couple of weeks prior to the budget and despite previous assurances from Keir Starmer that this would not happen. I stand by the campaigns currently being run by the NFU and the CLA to reverse this and feel that we as farmers and members of the farming community now have to make a stand – whether you choose to do this through attending the protest in London on 19th November, taking part in the strike or writing to your MP, the choice is yours, but please do get involved as the effects of this legislation are going to have many far reaching effects, many of which we are currently not aware I am sure.
If you would like to discuss how the budget will effect your farm business, do get in touch with Gemma on 07533340847 or gemma@blackdownconsulting.co.uk
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