The Rural Bulletin: 1st November 2018

Autumn Budget 2018 round up

Chancellor Phillip Hammond unveiled a number of new policy announcements in this year’s Autumn Budget which look set to benefit farmers and landowners:

• Cuts to business rates: Business rates will drop by a third for any business that has a rateable value of less than £51,000.

• Increases to Annual Investment Allowance: The AIA will increase from £200,000 per year to £1m for all qualifying investments in plant and machinery made between 1 January 2019 and 31 December 2020.

• Capital allowances on new agricultural buildings: New non-residential buildings will be eligible for a Structures and Buildings Allowance (SBA) where all the contracts for the physical construction are entered into from 29 October 2018.

• Additional funding for rural broadband: £200m has been allocated to ensure full fibre internet in rural areas by 2033. 

• Increases to tax allowances: Income tax personal allowances will increase to £12,500 from April 2019 and the threshold for higher tax rate will increase to £50,000 from April 2020.

• Increases in minimum wage: From April 2019, the National Living Wage for over 25s will increase to £8.21/hr and the National Minimum Wage for under 25s will increase to £7.70/hr.

• Pending response to the Letwin Review: Sir Oliver Letwin has published his review of build out rates following successful planning applications. Recommendations include giving local councils the ability to decide where large-scale housing developments should take the threshold for higher tax rate will increase to £50,000 from April 2020.

• Increases in minimum wage: From April 2019, the National Living Wage for over 25s will increase to £8.21/hr and the National Minimum Wage for under 25s will increase to £7.70/hr.

• Pending response to the Letwin Review: Sir Oliver Letwin has published his review of build out rates following successful planning applications. Recommendations include giving local councils the ability to decide where large-scale housing developments should take place and the ability to compulsorily purchase that land. The government’s  response can be expected in early 2019. 

Commenting on the announcement Andrew Shirley, Head of Rural Research, said: "The Chancellor was in a surprisingly generous mood - the increase in the Annual Investment Allowance will be particularly helpful for rural landowners looking to diversify or restructure ahead of Brexit.

"However, the 2033 target for rolling our rural fibre broadband is not sufficiently ambitious. In an increasingly digital economy rural businesses need to be connected now not in 15 years.”

The Letwin Review

Sir Oliver Letwin has published his review of build out rates following successful planning applications. Recommendations include giving local councils the ability to decide where large-scale housing developments should take place and the ability to compulsorily purchase that land. 

Tom Stanley from our Residential Development and Planning team commented: “Letwin recommends a series of interventions by local government and private sector that will directly affect the pace of delivery of houses and affect  overall land value.

On larger housing sites Letwin promotes the idea of a greater mix of houses, increased Compulsory Purchase Powers and the creation of a Strategic Infrastructure Tariff for Combined Authorities – for example those authorities with Joint Local Plans or Strategic Plans. All these initiatives are centred on driving land value down.” 

Jonathan Scott-Smith, from our Compensation and Compulsory Purchase department continued: ”I question whether the use of compulsory purchase powers will help bring land forward. Attempts by local authorities to acquire land at less than full development value, parcel it up and sell it on at what might be a substantial profit, are likely to be resisted and potentially hinder, rather than help, the process.” 

The government’s response can be expected in early 2019. 

Free herd health programme opens to Welsh farmers

Dairy farmers in Wales can now apply for free financial and technical support to improve herd health as part of the AHDB Dairy Improvement Programme. 

The £6.5m funding from the Welsh Government Rural Development Programme will be delivered over the next five years. 

The first phase of the programme – HerdAdvance - will provide support such as free herd health plan reviews, semen vouchers for breeding decisions, genomic testing and advice on reducing antibiotic usage. 

HerdAdvance is open to farmers with the majority of their farm in Wales and who are willing to commit to supplying regular data to monitor progress. 

The application window is open until 30 November and interested farmers must complete an Expression of Interest form. Find out more

Scottish Government to update tenant compensation eligibility 

The Scottish Government has brought forward legislation to update the list of improvements for which tenants should receive compensation when leaving a farm.

This will be the first time the improvements list has been updated since 1948 and aims to keep pace with evolving technology and farming practices. 

While the legislation already covers erections and enlargements of buildings, “work to dwellings” has been added to the list, in relation to work on the farmhouse or other houses forming part of the holding.

Structures to manage or store slurries or manures and store silage have also been added to the list of eligible improvements. 

Fergus Ewing, rural affairs secretary said: “For too long, the list of improvements for which tenant farmers can be compensated has been out-of-date and has not kept pace with change, which is why I am bringing these proposals forward.”

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