Autumn statement falls short for farmers warns NFU

Published 3rd Dec 2023, 11:45 GMT

Farm workers, agricultural contractors and sole traders have been given a National Insurance cut, farm shops and cafes could benefit from extension of current business rate relief and alcohol duty has been frozen until August 1 in potential boost to producers of beer, cider and wine.

The measures announced last Wednesday by Chancellor Jeremy Hunt, however, failed to clarify how Agricultural Property Relief will apply to ELMs.

The Chancellor’s headline announcement was to reduce Class 1 employee’s National Insurance from 12% to 10%. He also reduced Class 4 National Insurance for the self-employed from 9% to 8% and abolished self-employed Class 2 National Insurance.

Chancellor of the Exchequer Jeremy Hunt delivering his autumn statement in the House of Commons. Photo: UK Parliament/Jessica Taylor /PA Wire

There was an extension until 2024/25 of the current 75% relief on business rates up to £110,000 – which could impact farmers who have diversified into farm shops, cafes, or leisure facilities.

Alcohol duty was frozen until August 2024 - but there were none of the predicted changes to inheritance tax and the decision on how Agricultural Property Relief would be applied to Environmental Land Management schemes was deferred to Spring.

Sean McCann, Chartered Financial Planner at NFU Mutual, said: “The Chancellor mentioned the farmers who keep food on our plates when he announced cuts to self-employed national insurance, which he claims will save an average of £350 per year.

“While this is welcome, it’s important to remember that national insurance thresholds remain frozen until 2028, which will increase national insurance bills as earnings rise to keep pace with inflation.

“Employees will benefit from the change in January, while the self-employed won’t receive their cuts until April.

“With the Chancellor’s statement focused on backing business growth it’s surprising he didn’t go further and reduce employer’s national insurance too.

“It was disappointing there was no further detail on how Agricultural Property Relief will be applied to land taken out of agricultural production under some Environmental Land Management schemes, with that announcement being deferred until Spring.

“Farmers and landowners desperately need confirmation so they can plan accordingly for the future.”

Minette Batters, president of the NFU added that “the majority look set to miss out on some of the Chancellor’s headline measures”.

She added: “For instance, while we acknowledge the announcement of full expensing, most farm businesses are ineligible as the vast majority are unincorporated businesses. Similarly, while it’s positive to see streamlining of the planning system, especially on grid connections, again this appears limited to large scale projects.

“Farm businesses form the bedrock of the UK’s largest manufacturing sector – food and drink. To make a real difference, the Chancellor’s focus must be on targeted investment incentives to stabilise, grow and decarbonise our sector.”