Farming & agriculture

Agriculture accounting

**The 2024 Autumn Budget introduced significant changes for the farming and agriculture sector, particularly affecting inheritance tax. Discover our key services and further information below.**

Our specialist agricultural team, many of whom are from farming and rural backgrounds, provide accounting and taxation advice tailored to the agricultural sector.

At Ellacotts, we understand the unique challenges and opportunities faced by the agricultural sector. Our specialist knowledge allows us to address these unique challenges faced by clients in agribusiness. Our strong links to the farming community have allowed us to develop our expertise in all aspects of finance and taxation related to agriculture allowing us to provide tailored advice to our clients. We have supported numerous clients in the agricultural sector, showcasing our proactive approach to providing tailored advice and assistance.

Today we are market leaders in the agricultural sector and represent the interests of a large number of farmers, landowners, landed estates and other agri-businesses, both regionally and nationally. We also provide advisory services tailored to the needs of rural business clients, helping them adopt modern practices and diversify their operations to achieve success in a competitive and changing market.

The services we offer include:

Inheritance Tax and succession planning

The most tax-efficient way to pass on your business will vary significantly from one family to another, and farming families face unique challenges and considerations that require careful planning to ensure that your business remains viable while protecting your family’s interests.

We work closely with your family’s land agent and solicitor to ensure that legal documents such as partnership agreements, wills, trust deeds, and lasting powers of attorney reflect the needs and wishes of your family and your business.

We also help minimise tax liabilities during succession planning by structuring transactions to reduce capital gains tax exposure and ensuring proper tax return filing. This includes giving consideration to the next generation, emphasising the importance of developing strategies that protect assets and ensure a smooth handover. This includes giving consideration to:

• Inheritance tax reliefs (APR, BPR)

• Capital gains tax implications and reliefs

• Business structure including trusts

Property & land transaction planning

Land and property assets are a key part of most agricultural businesses. Navigating tax obligations during property transactions is crucial for ensuring tax compliance and avoiding unintended tax charges. There is potential to save significant amounts of tax with the right planning.

We can provide you with comprehensive guidance on:

• Land purchases, sales, and lettings

• Agricultural tenancy agreements

• Estate planning and rural property development

• Capital gains tax and reliefs

• Tax-efficient inheritance and succession planning

Our expertise also extends to helping clients maximise opportunities for business property relief, ensuring they benefit from tailored tax relief options.

Benchmarking and gross margin accounts

To enable you to make important and informed financial decisions, we provide gross margin accounts, which show in detail your different enterprises and the contribution they make to business profits.

These accounts allow us to benchmark your data against other farmers and then review how the farm has performed. Our specialised teams provide support for benchmarking and financial analysis, ensuring you receive comprehensive insights.

The information helps the process of making informed strategic business decisions such as investment in machinery or purchasing land.

Each year we hold a benchmarking event where we share the overall results of the harvest in financial terms, offering insight into how the industry is performing.

The 2022 Harvest – benchmarking

Renewables and diversification

As the agricultural landscape evolves, more and more farmers are diversifying their businesses by investing in renewable energy projects, such as wind, solar and biodiversity net gain (BNG). Anaerobic digestion is also a valuable opportunity within the renewables sector.

If you are considering investing in a renewable energy project, we can talk you through the relevant business and tax planning points.

Early involvement will ensure you implement the optimum trading structure for your new enterprise.

In addition, we can explain the tax implications of the new venture, which is particularly important when land is being taken out of agricultural production. Diversification and renewable energy projects contribute significantly to the growth of agricultural businesses by providing new investment opportunities and tailored support to help them thrive in a competitive environment.

Accounting and bookkeeping for agriculture

We offer accounting and bookkeeping services including accounts preparation to ensure that your annual compliance needs are met. This includes tax return preparation, and we can offer income tax planning opportunities and reviews. Our tax advice is tailored to the unique needs of agri-business clients, emphasising the importance of tax returns in agricultural accounting, particularly for complex land ownership transactions and optimising tax liabilities.

We also provide guidance on Making Tax Digital (MTD) specifically for farmers and agribusiness, helping clients comply with MTD requirements and maintain accurate financial records.

By outsourcing financial and accounting management services, including payroll, to Ellacotts, you have more time to concentrate on strategic issues and growing your agri-business.

Ellacotts Wealth Planning team can help you protect and manage the wealth that you have invested in your farm business and private portfolio.

Contact us today to discuss how we can assist with your agriculture accounting for your business.

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