Island Life Magazine Ltd December 2010/January 2011 | Page 189

island business

Island Life - December 2010
By Esme Shakeshaft
Moore Stephens Accountants

We were
pleased to
co-host a joint
seminar on
Tuesday 9th
November at Newclose Cricket Ground
with Mike Neville from Barclays Bank
and James Attrill from Christopher
Scott Ltd, when 50 farmers and guests
attended
The seminar explored expected
changes in the farming and agricultural
world over the next five years and
how these would impact on farming
businesses large and small. In
particular we considered:
1. Finance and funding;
2. Major taxation changes introduced
---by the 2010 Finance Acts.
3. The reform of the Common
---Agricultural Policy in 2013;
4. Current opportunities for sustainable
---and renewable energy projects;
5. The farming business in 2015.

In his presentation, Peter Warren
(Agricultural partner at Moore
Stephens, Newport) considered three
of the main tax changes introduced in
2010, and the impact these would have
on business strategies for the next five
years. Successful farming businesses
had diversified their business activities
over recent years and this trend was
expected to continue in the future as
new opportunities arose. There was
much current interest and activity in
sustainable and renewable energy
projects. As any new enterprise should
increase profit, would probably involve
capital expenditure and may require the
sale of an existing asset to generate
funds, the main tax changes covered
were:
a) The high marginal rates of income
tax – especially the 60% trap – and
need to consider use of companies to
minimise the tax burden;

Tel: 01983

expenditure which will see the Annual
Investment Allowance drop from
£100,000 to £25,000 on 6 April 2012
and therefore require a review of capital
expenditure plans;
c) The complex area of Capital Gains
Tax where case studies were discussed
to illustrate the substantial increase
in tax charges arising under rules
applicable from 22 June 2010. A simple
and straightforward transaction would
now see the tax payable increase
threefold as a result of the abolition
of Taper Relief from 6 April 2008 and
the new 28% rate of Capital Gains Tax
introduced in 22 June 2010.
Taxes had increased substantially and
were likely to stay at current levels for
several years. These taxes could not be
avoided but careful planning should
ensure that the effect on commercial
decisions was minimised.

b) New rules for tax relief on capital

Heat, not waste

Joanna Richards did not like to see the

product and

hardwood sawdust from her husband

love the idea.

Graham’s joinery company going to

In many ways

waste.

it sells itself,

So just over two years ago the

because it is

couple hit on the idea of converting

so good that

what would have been waste into fire

we can use

briquettes, and the project has proved

waste wood

a huge success.

in this way.

Joanna and Graham like to live as

It comes in

sustainably as possible and are always

from all over

looking to reduce wastage. It became

the Island,

clear to them that besides selling

and can be something so simple, yet so

softwood sawdust to horse and guinea

useful and productive.

pig owners, there was a way to turn

“We use sawdust or shredded

the hardwood dust into a wood fuel

off-cuts which are put into a hydraulic

to sell to a local market. So Wight

press to make the briquettes.”

Heat was set up on their farm, which

Scented briquettes are also made,

nestles under the Hoy Monum V