Why are Farmers Complaining

Stubod

https://www.youtube.com/watch?v=s9J0GpnXNhY

..this chap seems to talk a lot of common sense??

bjorn_toby_wilde

Farming is a way of life more than a job and most farmers do what they do because they love it and their children want to follow them. Many are asset rich and cash poor (a combine harvester costs half a million for example) so it doesn’t take a huge leap to see how many farms would be hit by the IHT changes.

Ironically the 20% rate means that the Clarksons and Dysons will still be better off buying farms than they would be by putting their money anywhere else.  It’s the small to medium sized farms that will be hit. They won’t have the available cash to pay the IHT bills without selling assets.

Food security should be one of our top priorities in an uncertain world and I don’t see how this helps.  If as the government says, it will only affect a few farms, then why do it in the first place? This budget was an opportunity to go after the big tax dodgers and the very wealthy but they seem to have got through it unscathed.

daveyjp

https://www.youtube.com/watch?v=s9J0GpnXNhY

..this chap seems to talk a lot of common sense??

He does, but as the land is now a financial instrument it means debts are secured on it by farmers and financial institutions. The impact of negative equity of farmland should prices fall dramatically wasn't covered.

DRS1

Moonwolf said:

I would only allow people to pass it on once.

I would keep track of everything someone has inherited in their lifetime and then they can pass on any added value tax free but the value they inherited is taxed at 100%.

Thus, if you inherit a total of £500k in your lifetime and die with £1m you can pass on £500k tax free but the rest is taxed.  If you die with £450K then you can't pass on anything.

This would mean that anyone can pass on the wealth they generated with their own hands but not benefit they just happen to inherit.

There would be a bit of admin, but I don't see why this can't be managed with good IT.

People are worried about Dyson and Clarkson and accountancy partners buying farms to avoid IHT.  So let's turn your idea on its head.  If you inherit the farm then you can pass it on IHT free (because that is truly a family farm) but if you bought it during your lifetime then your heirs pay IHT on it when you die.

Albermarle

MattMattMattUK said:

Albermarle said:

One point I do not get is that farmers constantly complain that costs are high, prices low and therefore they have very skinny margins .
Why then would you want your heirs to run such a difficult low margin business?

For many of the family farms it is not a business, it is a way of life, a culture, a calling, they do not want to make huge profits, just a fair and reasonable profit that means the business is sustainable, rather than than the current situation where food is too cheap and farming is becoming unsustainable. 

Albermarle said:

I suspect that farming is a more lucrative business than they make out, and they just like moaning a lot ( especially about the weather !) 

They moan about the weather because as we had a few years back, eight weeks of rain put the seed drilling back, which reduced the winter wheat yield by 30% which combined with the huge increase in fertiliser cots made many farms loss making. The supermarkets have spent decades screwing over farmers, the general public have been happy with that because it meant cheaper food, eventually something will break. 

Regarding the comment in bold.
I understand that farming runs in the blood of some people.
But that is not a good enough reason for them to get special privileges.

Nebulous2

 bjorn_toby_wilde said:

Farming is a way of life more than a job and most farmers do what they do because they love it and their children want to follow them. Many are asset rich and cash poor (a combine harvester costs half a million for example) so it doesn’t take a huge leap to see how many farms would be hit by the IHT changes.

Ironically the 20% rate means that the Clarksons and Dysons will still be better off buying farms than they would be by putting their money anywhere else.  It’s the small to medium sized farms that will be hit. They won’t have the available cash to pay the IHT bills without selling assets.

Food security should be one of our top priorities in an uncertain world and I don’t see how this helps.  If as the government says, it will only affect a few farms, then why do it in the first place? This budget was an opportunity to go after the big tax dodgers and the very wealthy but they seem to have got through it unscathed.

Not according to the BBC. How many farms would be affected by Budget changes? - BBC News About 500 bigger ones a year. 

Farmers are amongst the biggest benefit recipients in the country. I understand farming support / subsidies represent more than 50% of their income. Even after the changes come in they will still have much more favourable treatment than most other people. 

Its pretty much universal though, New Zealand stopped all subsidies and their farmers seem to flourish, but there hasn't been a rush by other countries to emulate them. 

At the same time it is a lonely, cold pursuit, particularly in the winter, with the solitary aspect contributing to fragile mental health, and a lot of time to nurse grievances. They don't often see the benefits of their money, the occasional big holiday, a decent car, a bungalow to retire to, but most of the time long gruelling hours.

This makes them ideal recruits into the ongoing culture wars, by skilled manipulators on social media.  

bjorn_toby_wilde

Nebulous2 said:

 bjorn_toby_wilde said:

Farming is a way of life more than a job and most farmers do what they do because they love it and their children want to follow them. Many are asset rich and cash poor (a combine harvester costs half a million for example) so it doesn’t take a huge leap to see how many farms would be hit by the IHT changes.

Ironically the 20% rate means that the Clarksons and Dysons will still be better off buying farms than they would be by putting their money anywhere else.  It’s the small to medium sized farms that will be hit. They won’t have the available cash to pay the IHT bills without selling assets.

Food security should be one of our top priorities in an uncertain world and I don’t see how this helps.  If as the government says, it will only affect a few farms, then why do it in the first place? This budget was an opportunity to go after the big tax dodgers and the very wealthy but they seem to have got through it unscathed.

Not according to the BBC. How many farms would be affected by Budget changes? - BBC News About 500 bigger ones a year. 

Farmers are amongst the biggest benefit recipients in the country. I understand farming support / subsidies represent more than 50% of their income. Even after the changes come in they will still have much more favourable treatment than most other people. 

Its pretty much universal though, New Zealand stopped all subsidies and their farmers seem to flourish, but there hasn't been a rush by other countries to emulate them. 

At the same time it is a lonely, cold pursuit, particularly in the winter, with the solitary aspect contributing to fragile mental health, and a lot of time to nurse grievances. They don't often see the benefits of their money, the occasional big holiday, a decent car, a bungalow to retire to, but most of the time long gruelling hours.

This makes them ideal recruits into the ongoing culture wars, by skilled manipulators on social media.  

I read that too but it didn’t strike me as a very thorough piece of research. DEFRA’s farm survey “suggests” that a third of farms are worth more than a million. “Another way is to look at the number of farms that are bigger than about 200 acres”. None of that sounds robust to me. It doesn’t even mention the costs of machinery, livestock, buildings, equipment.

200 acres is a small farm and that’s what you’d call subsistence farming.

Not sure about social media but I suspect the closest most farmers get to it is reading the Farmers Weekly over the breakfast table.

Nebulous2

bjorn_toby_wilde said:

Nebulous2 said:

 bjorn_toby_wilde said:

Farming is a way of life more than a job and most farmers do what they do because they love it and their children want to follow them. Many are asset rich and cash poor (a combine harvester costs half a million for example) so it doesn’t take a huge leap to see how many farms would be hit by the IHT changes.

Ironically the 20% rate means that the Clarksons and Dysons will still be better off buying farms than they would be by putting their money anywhere else.  It’s the small to medium sized farms that will be hit. They won’t have the available cash to pay the IHT bills without selling assets.

Food security should be one of our top priorities in an uncertain world and I don’t see how this helps.  If as the government says, it will only affect a few farms, then why do it in the first place? This budget was an opportunity to go after the big tax dodgers and the very wealthy but they seem to have got through it unscathed.

Not according to the BBC. How many farms would be affected by Budget changes? - BBC News About 500 bigger ones a year. 

Farmers are amongst the biggest benefit recipients in the country. I understand farming support / subsidies represent more than 50% of their income. Even after the changes come in they will still have much more favourable treatment than most other people. 

Its pretty much universal though, New Zealand stopped all subsidies and their farmers seem to flourish, but there hasn't been a rush by other countries to emulate them. 

At the same time it is a lonely, cold pursuit, particularly in the winter, with the solitary aspect contributing to fragile mental health, and a lot of time to nurse grievances. They don't often see the benefits of their money, the occasional big holiday, a decent car, a bungalow to retire to, but most of the time long gruelling hours.

This makes them ideal recruits into the ongoing culture wars, by skilled manipulators on social media.  

I read that too but it didn’t strike me as a very thorough piece of research. DEFRA’s farm survey “suggests” that a third of farms are worth more than a million. “Another way is to look at the number of farms that are bigger than about 200 acres”. None of that sounds robust to me. It doesn’t even mention the costs of machinery, livestock, buildings, equipment.

200 acres is a small farm and that’s what you’d call subsistence farming.

Not sure about social media but I suspect the closest most farmers get to it is reading the Farmers Weekly over the breakfast table.

That BBC article says a couple could have £2.5 million free of IHT. 

They always have the ability to pass it on earlier before they die. I've known a few farmer's sons who have had a miserable existence, with a threat of being disinherited to keep them in line, while the old couple live in the big farmhouse and pull all the strings, long past retirement age. 

Moonwolf

DRS1 said:

Moonwolf said:

I would only allow people to pass it on once.

I would keep track of everything someone has inherited in their lifetime and then they can pass on any added value tax free but the value they inherited is taxed at 100%.

Thus, if you inherit a total of £500k in your lifetime and die with £1m you can pass on £500k tax free but the rest is taxed.  If you die with £450K then you can't pass on anything.

This would mean that anyone can pass on the wealth they generated with their own hands but not benefit they just happen to inherit.

There would be a bit of admin, but I don't see why this can't be managed with good IT.

People are worried about Dyson and Clarkson and accountancy partners buying farms to avoid IHT.  So let's turn your idea on its head.  If you inherit the farm then you can pass it on IHT free (because that is truly a family farm) but if you bought it during your lifetime then your heirs pay IHT on it when you die.

Or you could turn that on its head and make it like CGT.  It only becomes payable if and when it is realised.  If you keep it and run it as a farm then there is no tax to pay but if you sell it then you pay IHT as a percentage of the sale.  If you pass it on again as an inheritance then the clock is reset.  This means it works to pass it on as a business but not as an asset.

Asimovs_nightfall

MattMattMattUK said:

Asimovs_nightfall said:

The fairest thing to do would be to abolish inheritance - not inheritance tax!

Ah yes, envy, a great way to make policy decisions. If I work hard all my life, if I pay my taxes, if I invest and accumulate from my taxed income I should get to decide where that goes at the end, not have it confiscated by the state. 

Asimovs_nightfall said:

That would reshape the economy and address the levels of inequality that ultimately affect lower income/revenue farmers just as everyone else.

It would reshape the economy by causing most of the best and brightest to leave, it would go against human nature as parents want to provide for their children, it would be an inherently bad policy on just about every level. 

Absolute not envy.  Just a simple idealised statement.  What better than everyone having exactly the same starting point?  If wealth can't be inherited it would be utilised for other purposes.  

Although I don't know what I'd do if 'the best and brightest' left.  I'd be mortified.   No Charlie Mullins to fix my gas boiler on days like today.

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