21 December 2020

FARMERS: Is now a good time to invest?

With the prevailing uncertainty of what terms will be in place on our departure from the EU, is now really the best time to be making investments? Read our latest article below to find out all our top investment tips for the industry... 

The farming sector has not sat at such uncertain crossroads for many years. Events; both political and global, have created an almost perfect storm.

As at mid December 2020, we are still unaware on what terms we will exit the European Union. What we can be sure of is that change is around the corner. If there are new levies on agricultural produce then that will lead to a fall in demand, potentially causing major economic pressures to the industry.

At the same time, the new Agricultural Act will move away from the direct payment regime and introduce more targeted and environmental schemes.

On top of that, we are living through a global pandemic; a position the world has not endured for 100 years.

Considering all of this, is now the right time to invest?

Planning for the next 7 years as we transition away from direct land-based subsidies will play a major part of the decision-making process. Sitting down and deciding how best to replace the subsidy or how to redeploy your resources will be the key to the long-term success of your business.

What are the advantages of investing now?

• Low interest rates: Cheaper lending means lower financial costs making new tools and machinery more accessible.
• Capital Allowances: HMRC allows the cost of any qualifying investment to be offset. Annual Investment Allowances allow spending of up to £1,000,000 and attracts 100% of the cost to be deducted against your tax liability. The allowable expenditure will reduce from the 1^st January 2021 to £200,000 a year.
• Opportunity: The pandemic has created a fall in demand for large machinery, therefore using the laws of supply and demand we can predict that prices will fall, and opportunities will be available for smarter purchasing.

It is imperative to step back and review your business forecast for the next 1 to 4 years to give you an indication of how the decisions you make now will impact the future. Our experienced team of specialist farming and agriculture business advisors can help ensure you have considered all the options available to you for you for your business to prosper.

How can RWB help you?

With many years’ experience in the sector and excellent support network of other professionals we are best placed to support our agricultural clients. The need to plan for these changes, should be at the forefront of any thinking, this will need to be both Practically and Financial. Ensuring that your financial data is up to date and relevant will make those decisions easier to make.

Contact our Director, Gary Brockway, who specialises in agriculture directly on 0115 964 8874 or email him at garyb@rwbca.co.uk to find out how we can help you across all areas of your business.

The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.