Tax avoidence loophole on agricultural property closed

lostinrates

http://www.farming.co.uk/news/article/6236

I know a fair few people who will be 'got' by this.

Conrad

Your post is very timely.

I've recently for some odd reason had an influx of wealthy 'farmers', and I coundn't square how they have vastly more wealth than me, but tiny incomes.

Perhaps what you highlight has something to do with it?

Had one the other week that owns 5 properties worth £700k, all let, no mortgages, plus his farm and home worth about £3m with £250k mortgage, yet his annual income is just £13k!! (he's one of 'the poor' the bleeding heart Liberals wallow in sympathy for).

lostinrates

Most farms only make a profit once every four or five years....because the tax system effectively made it more sensible to do that. Its ridiculous and inherantly dishonest, even while legal.

The interesting thing for me is that this will also catch what is often described as untouchable traditionally tory voters.

StevieJ

Conrad wrote: »

Your post is very timely.

I've recently for some odd reason had an influx of wealthy 'farmers', and I coundn't square how they have vastly more wealth than me, but tiny incomes.

Perhaps what you highlight has something to do with it?

Had one the other week that owns 5 properties worth £700k, all let, no mortgages, plus his farm and home worth about £3m with £250k mortgage, yet his annual income is just £13k!! (he's one of 'the poor' the bleeding heart Liberals wallow in sympathy for).

Those farmers may be showing an unrealistic bottom line but I can assure you vast numbers in this country are actually earning less than that.

ILW

Tjhe tax system truly needs to be massively simplified to avoid all this cobblers.

abaxas

Lots of businesses are run under a technical loss for tax and grant advantages.

The system is stupid, how can making a loss be more profitable than running a profitable and sustainable business.

DervProf

ILW wrote: »

Tjhe tax system truly needs to be massively simplified to avoid all this cobblers.

And it could be, but proably won't.

Why ?

If the tax system were simpler, think of all the accountants that would go out of business, not to mention mortgage brokers.

And I suspect that a simpler tax system would mean less loopholes for people/companies to exploit. No way would we want that to happen.

chewmylegoff

conrad, do you mean that the farmer had a declared gross income of £13k, or that his taxable income was £13k?

chewmylegoff

DervProf wrote: »

And it could be, but proably won't.

Why ?

If the tax system were simpler, think of all the accountants that would go out of business, not to mention mortgage brokers.

And I suspect that a simpler tax system would mean less loopholes for people/companies to exploit. No way would we want that to happen.

i used to work for an accountancy firm which serviced the SME sector. i seem to recall our tax department being about 15-20 people in total including non fee earners. about 300 staff in total.

most accountants don't make a living out of doing tax work. for instance, most corporation tax returns for SMEs are not at all complicated and are done as part of the audit / accounts prep by non specialist staff (using tax software). for an audit lasting 2 weeks it might take 2-3 hours in total to do the tax work.

i doubt a simplification of the uk tax system would have much impact on the larger accountancy firms either as their multinational clients would still require complex multi-jurisdictional tax advice.

IMO, the reason it isn't done is because politicians like having a complicated system within which they can give incentives to win votes, and is nothing to do with keeping accountants and tax lawyers in jobs.