23
Jul
Are bright days still ahead for Britain’s rural businesses?
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The sun shone on this year’s Great Yorkshire Show earlier this month, but for many rural businesses, storm clouds are gathering.
Stuart Wright, a Partner in the newly expanded Harrogate office of top ten accountancy and professional services firm S&W, was with his family among the 140,000 visitors enjoying the show’s mix of tradition and innovation.
But as someone who advises farms and estates across Yorkshire and beyond, he saw more than just prize livestock and tractors. He said:
The rural economy is the backbone of our region, but behind the celebration, there’s real strain.
Stuart Wright
Farming has always been tough — tight margins, unpredictable weather and rising costs are nothing new. But a report published on the opening day of the event, commissioned by the Mayor of York and North Yorkshire, revealed that over half of farms in the region aren’t turning a sustainable profit.
Vanessa Lee, another visitor to the show and Partner in S&W’s Leeds office, said:
It’s an incredibly challenging sector.
Vanessa Lee
Add in sudden policy changes, like the closure of the Sustainable Farming Incentive and proposed cuts to inheritance tax (IHT) relief, and the pressure is mounting.
The IHT change, announced in last October’s budget, would limit inheritance tax (IHT) relief to the first £1 million of combined agricultural and business property. Property above that value would get only 50% relief – an effective IHT charge of 20% on the value of the estate.
No quick fixes
Many privately owned firms face a similar issue with identical reductions in business property relief (BPR), but for agricultural businesses, there are added complications. Stuart said:
A farm isn’t a typical trading business where the value is a multiple of profits. A lot of the value is tied up in the land, even when it’s not making the farmer a return.
These changes could force families to sell land just to pay the tax bill. That’s a heartbreaking prospect for farms that have been in the same hands for generations.
There’s no single solution. Many rural businesses have been shaped by decades of family decisions taken over generations. Vanessa added:
They are often complex businesses, and the solutions have to take account of that.
But S&W has walked this path with clients for years, helping them plan, diversify and protect what matters most. The firm has a long history advising landed estates, family farms and agricultural businesses. Across the UK, it supports clients with more than 450,000 acres under stewardship. Stuart said:
As ever, the innovation and energy on display at the show were incredible. With the right advice, I believe many rural businesses can not only survive — but thrive.
Since 1881, S&W has worked with businesses and individuals to navigate challenges, unlock potential and achieve the extraordinary. It advises prominent landed estates and traditional farming businesses across the country, supporting effective succession planning and helping to review management structures, income streams and control of assets.
S&W’s experts offer strategic advice on the full range of issues affecting rural businesses and families, from IHT planning, project appraisals and capital gains tax planning to conditional exemption planning, heritage maintenance funds and bloodstock. With local offices, national coverage and world-class expertise, we support clients across every stage of business and every season of life.
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