Tuesday, 26 August 2014

47 farmers aided by The Royal Bath and West of England Society

The Royal Bath and West of England Society have announced the great news that it has helped 47 farmers, by paying out well in excess of £300,000 from the Somerset Farm Recovery Fund.

The recovery fund was launched earlier in the year following a initial generous donation made by a local farming family who were so concerned by the difficulties being experienced by some farmers following the devastating floods.

The Society thanked everyone who has made a contribution to the fund from the first donation made by the farming family referred to above to members of the general public and those who generously donated prizes to raise funds via an online auction. In particular they also thanked Somerset Community Foundation and their Chief Executive John Sargent for all their help with the fund.

John Alvis, chairman of the Somerset Farm Recovery Fund, said: “The generosity of the general public, together with the match funding from the Somerset Community Foundation, has provided much-needed financial support for those struggling to put their lives and businesses back on an even keel. No-one should be in any doubt as to the difference this fund has made.”

Applications for grant aid were invited from farmers whose livelihoods had been affected by the floods and where they had suffered a loss of production and it is great news that the money which was collected has been so speedily and effectively distributed.

As living proof of the effectiveness of the scheme, one recipient wrote, “We are overwhelmed by the generosity of people and the support we have been given. The arrival of the cheque has saved our business and for that we are most earnestly grateful.”

However, although the worst may be over, some farmers will still suffer shortages of fodder over the coming winter while in the long term, efforts are still being made to tackle the needs of the levels and moors for the benefit of future generations.

In this context another fund called The Somerset Levels Relief Fund is approaching various organisations and charitable trusts to secure funding for a 20 year action plan drawn up by Somerset County Council in conjunction with other stakeholders and interested parties.

Edwin White, chairman of the Society’s agricultural policy group, said: “The Society has not taken its eye off the ball in securing funding for the long-term future of the levels.

“In the meantime, through the kindness and generosity of so many individuals and organisations, in just over four months we have been able to collect and distribute a large amount of money to where it was needed.”

So all in all this is a good news story and the Royal Bath and West of England Society should be proud of the pivotal role they have played and continue to play in support of our local farming communities on the Levels.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381
E: james.stephen@carterjonas.co.uk

Monday, 18 August 2014

What to do with farm workers accommodation

In recent times I have come across clients with an increasing number of enquiries regarding farm worker’s accommodation. It has often been traditional to provide a farm worker with a “tied” cottage as part of his/her employment package.

However, farmers need to take care to ensure they do not create security of tenure should the farm worker no longer be required and recently concerns have also arisen regarding potential tax liability if the rent paid is significantly below the “market” rent, which could result in sizeable back dated tax bill if the cottage is regarded as a “taxable benefit”.

In relation to the security of tenure issue I would advise farmers to offer new farm workers an assured shorthold tenancy (AST). This means the lease can be brought to an end on two months’ notice from the Landlord and one month’s notice from the tenant after an initial fixed term of usually 6 to 12 months. But care must be taken at the start of the lease to ensure that an assured agricultural occupancy is not created which can have serious implications from the landlord’s perspective.

Unlike a normal residential letting, where the default tenancy is an AST, in the case of a farm worker a notice needs to be served on the worker before occupation of the property is taken, specifically notifying the tenant that the tenancy will be an AST. This is important because if this notice is not served the Tenant will have and assured agricultural occupancy and vacant possession of the cottage will be difficult to obtain, even if the farm worker no longer works on the farm.

In addition farm workers, even if granted an AST, are often allowed to occupy the property at a low rent but to be an AST the rent cannot be lower than £250/year (approx £21/month). However, it appears that HMRC may be looking at tightening their rules on whether or not such an arrangement may be considered as a taxable benefit because clearly a rent of £250/year is far less than the market rent which may well be in the order of £600/month or more.

In order avoid the HMRC challenging whether or not such an arrangement is considered a taxable benefit, it is suggested the Landlord/employer reviews the farm worker’s contract to make sure the job description accurately and clearly demonstrates the need for the accommodation. The important points are that the accommodation is provided for the farm worker so he/she can:

  • live on-site to protect buildings, people or assets or
  • because the worker is regularly required to work particularly long working hours or
  • because the accommodation is required because of regulatory requirements

Thus, employment, tenancy and taxation law all appear to be intertwined when letting a cottage to a farm worker and care should be taken to ensure both Landlord and Tenant clearly understand the terms under which a property has been let so as to avoid costly disputes at a later stage.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381
E: james.stephen@carterjonas.co.uk

Tuesday, 12 August 2014

Ragwort is bad news

I read an article which was recently published in this paper with incredulity. The article was promoting the idea that Common Ragwort should not be kept under control because of the benefits it brings to wildlife.

From memory I think it was an organisation called Buglife that was promoting this quite absurd idea, the premise being that ragwort is not a poisonous as some people think. Well anyone who has fed hay to horses or cattle which is contaminated with ragwort will confirm that ragwort is poisonous and does kill such livestock.

Sheep on the other hand are more resistant and can be used to graze the ragwort in early spring so as to reduce its growth but having acted for a number of conservation organisations, I have never heard of one actually promoting the spread of ragwort.

For the uninitiated, ragwort is a vigorous plant which produces a bright yellow flower that is often seen at this time of year on land which has limited management input such as roadside verges, railway embankments and extensively grazed grassland. One of the problems is that it is a very effective plant; it is estimated each plant can produce between 75,000 and 120,000 seeds.

Thus when one looks at a sea of yellow heads waiving beside a road as one whizzes by, one can see why it is of concern to neighbours who may find their land infested with a very heavy weed burden.

This is why common ragwort is one of the five plants named as an injurious weed under the provisions of the in the Weeds Act 1959. This legislation has been further bolstered by the Ragwort Control Act 2003 which provides a code of practice on how to prevent the spread of ragwort. This does not mean to say it is illegal to have ragwort on your land but the Weeds Act gives the Secretary of State for the Environment, Food and Rural Affairs the power to order a landowner to take action to control the ragwort on their land.

I hope this goes to demonstrate that if governments, of all political persuasions, think the control of ragwort is worth legislating about, then surely there is no reason why anyone should be given air time to promote the spread of ragwort. I do not deny that some insects, including some rare ones may well like ragwort, or perhaps even depend on it, but from an agricultural perspective it is nothing but bad news.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381
E: james.stephen@carterjonas.co.uk

Monday, 11 August 2014

Immigration checks guidance causes confusion

Not for the first time, landlords and lettings agents have been left mystified by Government plans for them to become partly responsible for policing immigration.

We have all been aware for some time that, come October, we would have to be responsible for checking tenants’ immigration status. Now Government guidance has been issued that leaves things even cloudier rather than clearer.

The guidance issued first on August 7, withdrawn in the early hours of, and then reissued a short time later, on August 8, appears to have watered down the requirements and speaks only of an introduction “in late Autumn 2014”.

The “factsheet” now states that checks will only come into force in one area of the UK this year and may then be rolled out more widely during 2015.

But so far there is no clue as to where that area will be and the draft Codes of Practice, guidance, and on-line resources for making the checks, including an aid to help landlords and tenants identify whether they are affected and, if so, how to conduct a check will be published at the same time.
In some ways this is a relief – it could take the pressure off many landlords. But the downside is that none of us knows whether or not we are affected so we still have to be vigilant, prepared, and await the announcement as to which area of England will be the policy pioneer. No landlord, or letting agent, can be sure they are off the hook temporarily because they are not in the launch area or permanently because the latest guidance also infers that rolling out the checks more widely may not happen.

The Government says the checks will be very simple and in most cases can be carried out while avoiding the need to contact the Home Office. But the Government has also promised it will provide a comprehensive set of services to help in conducting the checks, including both on-line and via a local-rate telephone helpline providing general information as well as a checking service for more complex cases.

In the meantime, it’s suggested landlords and tenants take a look at the right to work check (www.gov.uk/legal-right-to-work-in-the-uk), which is similar to the resource being introduced for landlords. The Government says the employers’ resource has “attracted praise as being user friendly, quick, and easy to use”.

Landlords and lettings agents who fail to carry out the checks will be given a civil penalty up to a maximum of £3,000. Thankfully this means it is not a criminal conviction but there is no explanation as yet as to who imposes the penalty or assesses its scale.

Checks will be “simple and straightforward” to complete. Landlords will need to obtain and copy documents demonstrating an individual’s right to rent in the UK, such as a passport or biometric residence permit. In most cases there will be no need for landlords to contact the Home Office but to be safe the credentials of all tenants, even those apparently “British” will need to be checked, if only in the interests of racial equality.

The case-checking service will be used for status verification where the prospective tenant has an outstanding immigration application with the Home Office or the Home Office has their documents. This service will provide a clear yes/no response within two working days. If a landlord has not had an answer from the Home Office within two working days, they can go ahead and rent without risk of incurring a penalty.

Landlords will only have to conduct checks on new, and not existing, tenants from the implementation date.

Perhaps the most worrying aspect of the guidance from the Home Office is the note at the end: “August 2014 – All information in this factsheet was correct at the time of publishing but is subject to change.” So even though we have guidance, we have no definite idea of what is to come!
However, rest assured we are watching developments closely and I will update you immediately there is confirmation, when we also put in place appropriate internal procedures.

The Home Office factsheet can be found at:


Lisa Simon, 
Head of Residential Lettings
T: 020 7518 3234 
E: lisa.simon@carterjonas.co.uk

Monday, 4 August 2014

Farmers thinking twice about investing

With commodity prices falling many farmers will be thinking twice about making any significant investment in their farm but for some, with a bit of imaginative advice from your accountant it may be possible to use your pension fund to invest in a new farm building for example and in so doing cut the overall cost of such an investment.

For example Mike Butler, partner at Old Mill accountants who have recently moved to new offices in Wells, recently helped a Wiltshire based farming business save more than £180,000 on building a new grain store.

“The idea is that you use a self-invested pension to pay for the land and build costs,” he says. “That provides tax relief against profits of between 20-45%, depending on whether you trade as a company, sole trader or partner.”

Once built, the farm can then rent the grain store off the pension fund. The rent paid by the farming business will be a tax deductable expense, thereby saving income or corporation tax while the rent received by the pension fund can either be used to build up reserves in the fund or to pay off any borrowing which the fund may have taken out to support the cost of the project.

Obviously this only works if the underlying business is profitable and is therefore able to pay the rent but if this is the case, significant savings can be made. However, such a project requires careful planning to avoid any pitfalls. “Start planning well in advance to allow the financial planning team to register the pension fund, take care of invoicing and pricing, and ensure appropriate VAT is reclaimed in good time,” warns Mr Butler.

“You also need an exit plan in place to release the pension funds when you do come to retirement.” This can be done by selling the building on the open market, selling back to the farm business, or, ideally, to another pension fund set up by the younger generation.

But clearly some farm buildings, particularly if they are located in the heart of a farm building complex may be difficult to sell on the open market and so if selling in this manner is your chosen exit strategy, I would advise that you take care to ensure the building is suitably located so that it is saleable.

So if you are contemplating making a significant investment on your farm and also have an eye on your long term retirement plans I suggest you approach your accountant to investigate the potential available to you.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381
E: james.stephen@carterjonas.co.uk

Friday, 1 August 2014

City-state of the nation

With Scotland’s electorate deciding if it feels better together or not in September, Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, wants to know if smaller can be better.

Early in July, the Government announced the release of the first tranche of a big pot of £6 billion of cash for the English regions. With an eye on being better together and although the phase 1 £12 billion is very much for England, the Prime Minister heralded Growth Deals as ‘...a crucial part of our long-term plant to secure Britain’s future.’

In this first phase, £71.1 million is allocated to what’s termed the ‘Cambridge Corridor’ for projects which include transport and science and technical innovation centres. The day after the Government’s announcement, the Cambridge Ahead organisation said that the £13 billion economic powerhouse that is Cambridge needs to be on its guard as its top business talent can be enticed away to London because of, among other things, Cambridge’s poor transport infrastructure and paucity of night time entertainment.

Cambridge Ahead is looking to pitch Cambridge as the ‘pre-eminent small city in the world.’ It’s a flight of fancy on my part but perhaps Cambridge could make the case for city-state status like that of Singapore, Andorra or Macau? Or those classic city-states of Rome or Athens?

Too landlocked, perhaps, for parity with the city-state of medieval Venice, there would be there would be no shortage of candidates for The Doge of Cambridge as there are plenty of shrewd citizens and the modern equivalent of rich merchants. The great buildings of Venice see themselves reflected in the palaces of learning which are the University Colleges. So influential is the business success of Cambridge, that it could make a claim for sovereignty and overlordship over adjacent counties which is a pre-requisite characateristic of historical city-states.

Of course, this idea must be treated with the levity it deserves but Cambridge continues to reinforce its position as the most commercially influential location in the eastern region. Rather than city-state, perhaps there’s a case to be made for ‘city-region’?

It is regional causes and cases for investment and development which are the cause celebre this summer and beyond, in all probablility – and not only with the policy-makers but with policy influencers too.

The RSA City Growth Commission (thersa.org.uk) published a report in July called “Connected Cities: The Link to Growth”. The report references city-regions but prefers to use the term ‘Metros’ in arguing that individual cities , such as Leeds, Manchester and Sheffield, should have the freedom to operate as collective metros to make their own decisions when it comes to infrastructure investment.

In not relying on centralised decisions from Whitehall about what’s best and how much is best for its metro, the report makes the case that this devolved approach in England would see a counterbalance to the dominance of London and the South East. In turn, this would be in the best interests of the whole of the UK’s economic growth and chances of prosperity being spread geographically to all our benefit.

In the early autumn, the UK nation state faces the prospect of losing its most northerly part but such is the jigsaw of our country that there are rumblings in Orkney and Shetland that perhaps they have more in common with their Scandanavian counterparts than with Scotland’s central belt and its kingmakers at Holyrood.

Will Mooney MRICS

Commercial, Cambridge