Agricultural workers living in a home that goes with their job have been put on notice that they could soon face paying income tax on its rental value.
The Office of Tax Simplification (OTS) will be pressing the next Government of whatever political hue to implement its proposals that where a home is provided as a custom rather than as a requirement of employment it should be seen as a taxable benefit based on its open market rental value.
This is a stark warning of what may be to come as the drive continues towards raising tax revenues without raising general income tax rates that would be more widely unpopular.
Company car drivers have long known the personal cost of having a car provided by their employer and this view of taxable perks has been greatly expanded by HMRC to include things such as mobile phones, too.
Many farmers and their staff probably thought the provision of homes would remain under the radar but this is clearly no longer the case.
There will be exceptions – the OTS is proposing that where the employee is required to live in accommodation to enable the protection of buildings, people, or assets; where the employee is required to work long hours; or where residence is a result of regulatory requirements these should continue to bring exemption.
Workers on arable holdings may have difficulty arguing their presence is essential as easily as those who work with livestock and have milking or animal welfare duties. In remote areas, it might be argued that security of assets is good enough reason for housing provision but you can be sure there will be a stringent assessment of any argument put forward in support.
The OTS is proposing that the benefit value is based on open market rent and that this should be reassessed every five years. The good news is that where tax exemption is agreed, that will also apply to ancillary services such as heat, light, and repairs but will not embrace council tax or water and sewage charges.
Employees might want to consider whether or not there will be a benefit in staying in farm accommodation while employers replacing staff who leave may want to withdraw free accommodation as part of the package unless they are sure its provision will not affect the employee’s tax liability or bring demands for higher wages together with an impact on their own payroll systems through operating P11D returns.
At the moment this is only a proposal but it is likely to become reality and so employers should talk to staff living in tied accommodation and discuss the possible impact so they can plan ahead.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
A property blog written and authored by our specialist blogging team, discussing all and any matter relating to the residential, rural and commercial property markets.
Saturday 31 January 2015
Friday 30 January 2015
Conscious uncoupling
Will Mooney, Carter Jonas partner and head of commercial and professional services in the eastern region “There is nothing permanent except change”, Heraclitus of Ephesus 535BC-475BC
I guess the works of the ancient philosophers have endured because they always seem to have a really good handle on modern life, don’t they? In mixing my ancient civilisations here, as the two-faced month named after the Roman god Janus ends, it seems to have rung in a mood of change – the mood which will surely go on to charactertise the rest of the year, as it does any year.
Divorce lawyers will confirm that January is good for business. It’s a month in which couples whose relationship has been rocky appear ready enough to confront the reality and initiate a change, whether permanent or temporary.
January this year saw Hollywood actor Gwyneth Paltrow admitting she regrets having used the phrase ‘conscious uncoupling’ when, last year, she announced that her and pop-star husband Chris Martin were divorcing. Yet, it’s an eloquent phrase impying, as it does, a grown up approach to unhitching in the way that ‘divorce’ has come to suggest something a bit more acrimonious.
In early January, the Swiss National Bank unhitched the Swiss Franc from the Euro. The following week Denmark was tipped to do the same with its Krone in anticipation of the European Central Bank (ECB) announcing a programme of Euro quantitative easing (QE) to alleviate the debts of certain Eurozone countries. The ECB having finally convinced Germany of the advisability of QE in the face of mounting disquiet and political unrest, particularly in those bailed-out Eurozone countries.
It’s been the month in which the battle of the supermarkets played out badly for two grocers occupying the middle ground. A pincer movement from food retailers at the premium and budget ends of the trolley park saw Dalton Philips step down as chief executive of Morrisons. In the same month, the last boss but two of Tesco came out in public to criticise his own immediate successor who, himself, had already resigned in July 2014.
In an interesting aside, on the theme of coupling and uncoupling, I read that a Cambridgeshire couple are planning to have their wedding reception in the café of their local branch of Morrisons in Cambourne - circumstances meant it was a frequent venue during their courtship.
In the week leading up to Burns Night on 25 January, proposals which could ramp-up the next phase of Scotland’s devolved powers were published for consultation. This is part of the phased fallout from Scotland rejecting to consciously uncouple itself from the Union in September last year.
Surely the most frenzied activity to couple or uncouple on the UK dating scene this year will be pre and post-General Election on May 07th. The blue and yellow members of the coalition have already embarked upon a fast track separation in talking about the differences in the coalition in party terms where once it was the coalition consensus that mattered above all else. Let’s hope any powerbroking in the absence of a workable majority administration will once more see peace and harmony in the Rose Garden of Number 10 soon after polling day.
With polling pundits calling a hung parliament, it’s been over 40 years – 1974 - since there have been two General Elections in one year here. How the times have changed since then.
I guess the works of the ancient philosophers have endured because they always seem to have a really good handle on modern life, don’t they? In mixing my ancient civilisations here, as the two-faced month named after the Roman god Janus ends, it seems to have rung in a mood of change – the mood which will surely go on to charactertise the rest of the year, as it does any year.
Divorce lawyers will confirm that January is good for business. It’s a month in which couples whose relationship has been rocky appear ready enough to confront the reality and initiate a change, whether permanent or temporary.
January this year saw Hollywood actor Gwyneth Paltrow admitting she regrets having used the phrase ‘conscious uncoupling’ when, last year, she announced that her and pop-star husband Chris Martin were divorcing. Yet, it’s an eloquent phrase impying, as it does, a grown up approach to unhitching in the way that ‘divorce’ has come to suggest something a bit more acrimonious.
In early January, the Swiss National Bank unhitched the Swiss Franc from the Euro. The following week Denmark was tipped to do the same with its Krone in anticipation of the European Central Bank (ECB) announcing a programme of Euro quantitative easing (QE) to alleviate the debts of certain Eurozone countries. The ECB having finally convinced Germany of the advisability of QE in the face of mounting disquiet and political unrest, particularly in those bailed-out Eurozone countries.
It’s been the month in which the battle of the supermarkets played out badly for two grocers occupying the middle ground. A pincer movement from food retailers at the premium and budget ends of the trolley park saw Dalton Philips step down as chief executive of Morrisons. In the same month, the last boss but two of Tesco came out in public to criticise his own immediate successor who, himself, had already resigned in July 2014.
In an interesting aside, on the theme of coupling and uncoupling, I read that a Cambridgeshire couple are planning to have their wedding reception in the café of their local branch of Morrisons in Cambourne - circumstances meant it was a frequent venue during their courtship.
In the week leading up to Burns Night on 25 January, proposals which could ramp-up the next phase of Scotland’s devolved powers were published for consultation. This is part of the phased fallout from Scotland rejecting to consciously uncouple itself from the Union in September last year.
Surely the most frenzied activity to couple or uncouple on the UK dating scene this year will be pre and post-General Election on May 07th. The blue and yellow members of the coalition have already embarked upon a fast track separation in talking about the differences in the coalition in party terms where once it was the coalition consensus that mattered above all else. Let’s hope any powerbroking in the absence of a workable majority administration will once more see peace and harmony in the Rose Garden of Number 10 soon after polling day.
With polling pundits calling a hung parliament, it’s been over 40 years – 1974 - since there have been two General Elections in one year here. How the times have changed since then.
Will Mooney MRICS
Partner
Commercial, Cambridge
Tuesday 27 January 2015
Pulse & plus points of the early 2015 market
Once again, early year market activity has not disappointed. This is the fifth January in-a-row where the residential sales market has hit the ground running as soon as we returned to our desks.
To recap, 2014 was a year of two halves.The first six months saw strong activity right across price ranges – quite frankly, the starting gates flew open. But just as we were about to loosen the reins and push on into a full gallop, the Bank of England halted the momentum with its cautionary suggestion of an earlier increase in interest rates than predicted. Greater mortgage regulation helped slow the pace even more.
A long-term comfort to our market, however, is that Mark Carney so clearly adapts to market reactions. Latest predictions now expect the ‘new normal’ level for rates to sit at around 2-3% and, also, that the incremental increases may not start until Q4 2015 but, in all likelihood, in 2016. With low inflation, the crude oil price meltdown and weak wage growth, it looks like 0.5% may be banked upon for this present year.
The 2014 Autumn Statement announcement of stamp duty reforms was a surprise but it’s proving a good thing for the greater bulk of the market in that house purchases less than £937,500 will now face lower stamp duty charges. Above this threshold, the market is already beginning to absorb the changes and the higher cost of moving is now being consistently raised in our sales negotiations between purchasers and vendors.
The Christmas holidays are always an important decision-making time for both buyers and sellers. And, such is the pace of modern consumer demand, people seek immediacy as soon as the decision has been made to move. Hence we now advise vendors to launch to market as early as possible in the new year to, quite frankly, embrace and satisfy the “I want it now” mentality.
Marketing in the first three months of 2015 is more important than ever this year with the General Election bearing down on us on 7 May, as we anticipate a nervous pre-election lull in April. The mansion tax, or variations of it, favoured by both the Labour Party and Liberal Democrats is already having an unsettling impact on the prime markets both in and outside London. Should I put my money on it, I cannot visualise these pre-election manifesto proposals becoming post-election policies but who’s to say?...
So, the year has started with strong apres-Christmas pent-up demand, a renewed confidence in interest rates staying at 0.5% and continuing confidence in property as a non-volatile asset (unlike the recent performances of the stock market, currencies and commodities, not to mention oil). Average UK house prices are anticipated to rise by 3.5% in 2015 with ‘steady-as-she-goes’ growth over the next 5 years – some suggesting by 18%.
With the coalition government ‘consciously uncoupling’ itself into distinct blue and yellow rosette stances when it comes to views on housing market intervention, it is unlikely that the Spring Budget will see any significant policy initiatives which will have a direct impact on the housing market, such as Help to Buy or further SDLT reforms.
The only certainty about the General Election when it comes to the housing market is the date itself. So if you’re in the market for a move, we’re saying best make it now.
To recap, 2014 was a year of two halves.The first six months saw strong activity right across price ranges – quite frankly, the starting gates flew open. But just as we were about to loosen the reins and push on into a full gallop, the Bank of England halted the momentum with its cautionary suggestion of an earlier increase in interest rates than predicted. Greater mortgage regulation helped slow the pace even more.
A long-term comfort to our market, however, is that Mark Carney so clearly adapts to market reactions. Latest predictions now expect the ‘new normal’ level for rates to sit at around 2-3% and, also, that the incremental increases may not start until Q4 2015 but, in all likelihood, in 2016. With low inflation, the crude oil price meltdown and weak wage growth, it looks like 0.5% may be banked upon for this present year.
The 2014 Autumn Statement announcement of stamp duty reforms was a surprise but it’s proving a good thing for the greater bulk of the market in that house purchases less than £937,500 will now face lower stamp duty charges. Above this threshold, the market is already beginning to absorb the changes and the higher cost of moving is now being consistently raised in our sales negotiations between purchasers and vendors.
The Christmas holidays are always an important decision-making time for both buyers and sellers. And, such is the pace of modern consumer demand, people seek immediacy as soon as the decision has been made to move. Hence we now advise vendors to launch to market as early as possible in the new year to, quite frankly, embrace and satisfy the “I want it now” mentality.
Marketing in the first three months of 2015 is more important than ever this year with the General Election bearing down on us on 7 May, as we anticipate a nervous pre-election lull in April. The mansion tax, or variations of it, favoured by both the Labour Party and Liberal Democrats is already having an unsettling impact on the prime markets both in and outside London. Should I put my money on it, I cannot visualise these pre-election manifesto proposals becoming post-election policies but who’s to say?...
So, the year has started with strong apres-Christmas pent-up demand, a renewed confidence in interest rates staying at 0.5% and continuing confidence in property as a non-volatile asset (unlike the recent performances of the stock market, currencies and commodities, not to mention oil). Average UK house prices are anticipated to rise by 3.5% in 2015 with ‘steady-as-she-goes’ growth over the next 5 years – some suggesting by 18%.
With the coalition government ‘consciously uncoupling’ itself into distinct blue and yellow rosette stances when it comes to views on housing market intervention, it is unlikely that the Spring Budget will see any significant policy initiatives which will have a direct impact on the housing market, such as Help to Buy or further SDLT reforms.
The only certainty about the General Election when it comes to the housing market is the date itself. So if you’re in the market for a move, we’re saying best make it now.
Caroline Edwards
Partner
Residential Sales, Long Melford
T: 01787 888622
E: caroline.edwards@carterjonas.co.uk
Monday 26 January 2015
Farmers to be allocated entitlements
Farmers should be aware of one unexpected consequence of the introduction of the new Basic Payment Scheme (BPS) which seems inherently unfair and is as a consequence of a “one off” rule that will be implemented this year only.
Under the new scheme farmers will be allocated “entitlements” which they need to use to claim against their land. One entitlement will need to be matched against one hectare of qualifying land in order to make an effective claim. The new BPS entitlements will be derived from the old Single Payment Scheme (SPS) entitlements that a farmer already holds.
Under the old scheme, farmers were able to hold more entitlements than land; they could not claim on the spare entitlements but provided they used them every other year they could hold on to them. However in the first year of the BPS any “spare” entitlements will be confiscated without compensation which for most farmers will not have a significant impact.
For those farmers who take on extra land in 2016 this may be a problem if they are not able to acquire the matching number of entitlements from the outgoing farmer because the supply of spare entitlements will be restricted to those farmers who can no longer claim on all some of their own land next year. This may be because they have built a solar park on their land or sold land for development for example.
But, there is one group of farmers where the new rule will have an unexpected consequence and that is farmers whose land may be affected by an infrastructure project in 2015. Such projects are often temporary in nature and may involve a water company installing a new sewer or water pipe for example. Here land will be temporarily taken out of production along the route of the pipe and where contractor’s compounds or pipe stores are required.
In such instances farmers will generally not be allowed to claim on the affected land because it will not comply with the myriad of “cross compliance” rules which are a feature of the both the old SPS and BPS. However, if this land cannot be claimed on in 2015, the farmer will permanently lose the matching entitlements even though the loss of land has only been temporary and has been at the behest of a third party out of the farmer’s control.
I have enquired whether these circumstances could be considered as “force majeure” thereby exempting a farmer from losing entitlements but I am informed this is not permitted. Therefore farmers affected by schemes that will result in a temporary loss of land this year will incur a permanent loss of the equivalent number of entitlements. This will not happen in future years because the ongoing rules allow entitlements to be used every other year.
Therefore if any farmers are likely to be affected by such a scheme please do to contact me and for free advice on this subject.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Under the new scheme farmers will be allocated “entitlements” which they need to use to claim against their land. One entitlement will need to be matched against one hectare of qualifying land in order to make an effective claim. The new BPS entitlements will be derived from the old Single Payment Scheme (SPS) entitlements that a farmer already holds.
Under the old scheme, farmers were able to hold more entitlements than land; they could not claim on the spare entitlements but provided they used them every other year they could hold on to them. However in the first year of the BPS any “spare” entitlements will be confiscated without compensation which for most farmers will not have a significant impact.
For those farmers who take on extra land in 2016 this may be a problem if they are not able to acquire the matching number of entitlements from the outgoing farmer because the supply of spare entitlements will be restricted to those farmers who can no longer claim on all some of their own land next year. This may be because they have built a solar park on their land or sold land for development for example.
But, there is one group of farmers where the new rule will have an unexpected consequence and that is farmers whose land may be affected by an infrastructure project in 2015. Such projects are often temporary in nature and may involve a water company installing a new sewer or water pipe for example. Here land will be temporarily taken out of production along the route of the pipe and where contractor’s compounds or pipe stores are required.
In such instances farmers will generally not be allowed to claim on the affected land because it will not comply with the myriad of “cross compliance” rules which are a feature of the both the old SPS and BPS. However, if this land cannot be claimed on in 2015, the farmer will permanently lose the matching entitlements even though the loss of land has only been temporary and has been at the behest of a third party out of the farmer’s control.
I have enquired whether these circumstances could be considered as “force majeure” thereby exempting a farmer from losing entitlements but I am informed this is not permitted. Therefore farmers affected by schemes that will result in a temporary loss of land this year will incur a permanent loss of the equivalent number of entitlements. This will not happen in future years because the ongoing rules allow entitlements to be used every other year.
Therefore if any farmers are likely to be affected by such a scheme please do to contact me and for free advice on this subject.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday 19 January 2015
Unlikely that milk prices will improve in the short term
The crisis in the dairy sector is well documented and it seems unlikely that milk prices will improve in the short term as world stocks of dairy commodities remain high and in Europe we are affected by the Russian import ban and increased levels of production.
This is likely to be further exacerbated by the scrapping of Milk Quota in April this year. Milk Quota was introduced by the then EEC on 2nd April 1984 so as to control the “milk lakes” and “butter mountains” that were costing the EEC vast sums of money to store in intervention stores. The introduction of Milk Quota meant that UK farmers had to cut production by approximately 20% as compared to what they had produced in 1983 and if their milk production exceeded their allocation of Milk Quota they had to pay a penal fine.
There was no compensation for the introduction of Milk Quota and as time went on the Milk Quota itself acquired a value because it became the limiting factor which stopped farmers from being able to expand. Over the first 20 years or so of its existence this country regularly went “over quota” and dairy farmers faced the prospect of fines and in some instances this resulted in farmers having to throw milk away.
However, since 2004 this country has not gone over quota and as a consequence the value of Milk Quota has plummeted from the heights of when it was worth as much as 80p per litre to today when it is worth a fraction of a penny per litre. Thus in financial terms, the fact the EU is going to scrap Milk Quota this spring is of little direct financial consequence for our dairy farmers but if the scrapping of quota encourages milk production across the EU where some countries have still been exceeding their quota, this may have a significant effect on production, further exacerbating the current oversupply situation.
However a call from the European Milk Board this week asking the EU to introduce a compensation programme for farmers to cut production seems to me to be out of step with reality. We are in a very different place from where we were 30 years ago. Back then virtually all milk produced by farmers was guaranteed to be bought off them by the Milk Marketing Board and if the price fell below a certain level the EU would step in and purchase the surplus, putting it in to intervention stores.
The introduction of Milk Quota was a means of trying to reduce such expenditure on market support and in the intervening years the level of market intervention by the EU has dropped dramatically. As a result farmers are now exposed to the harsh realities of world commodity markets over which they, or indeed the EU has little influence.
Thus it is not Milk Quota nor EU market support which will dictate the survival of our dairy farmers, it is fundamentally world commodity markets and how efficiently the dairy farm is run and to whom the milk is sold, although this latter point is sometimes more a matter of luck rather than judgment. However, the one thing I think government should do is ensure farmers are treated fairly within the food supply chain; if supermarkets want to reduce the price of milk to attract customers in to their stores, that is one thing but this should not be at the cost of the producer who has no influence on this “price war”.
I am well aware supermarkets will explain that the farmers who supply them are paid a price which should return the farmer a profit but equally I would be interested to know whether all the liquid milk that is sold in a supermarket is supplied by milk secured from their own dedicated supply contracts? If not then they will be subsidising the “supermarket” price war with milk secured off other farmers who will not necessarily be being paid a “profitable” price for their milk. I would be interested if any supermarkets would like to contact me to discuss this matter in more detail because I think a clear understanding of this would be of interest to the readership of this paper.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
This is likely to be further exacerbated by the scrapping of Milk Quota in April this year. Milk Quota was introduced by the then EEC on 2nd April 1984 so as to control the “milk lakes” and “butter mountains” that were costing the EEC vast sums of money to store in intervention stores. The introduction of Milk Quota meant that UK farmers had to cut production by approximately 20% as compared to what they had produced in 1983 and if their milk production exceeded their allocation of Milk Quota they had to pay a penal fine.
There was no compensation for the introduction of Milk Quota and as time went on the Milk Quota itself acquired a value because it became the limiting factor which stopped farmers from being able to expand. Over the first 20 years or so of its existence this country regularly went “over quota” and dairy farmers faced the prospect of fines and in some instances this resulted in farmers having to throw milk away.
However, since 2004 this country has not gone over quota and as a consequence the value of Milk Quota has plummeted from the heights of when it was worth as much as 80p per litre to today when it is worth a fraction of a penny per litre. Thus in financial terms, the fact the EU is going to scrap Milk Quota this spring is of little direct financial consequence for our dairy farmers but if the scrapping of quota encourages milk production across the EU where some countries have still been exceeding their quota, this may have a significant effect on production, further exacerbating the current oversupply situation.
However a call from the European Milk Board this week asking the EU to introduce a compensation programme for farmers to cut production seems to me to be out of step with reality. We are in a very different place from where we were 30 years ago. Back then virtually all milk produced by farmers was guaranteed to be bought off them by the Milk Marketing Board and if the price fell below a certain level the EU would step in and purchase the surplus, putting it in to intervention stores.
The introduction of Milk Quota was a means of trying to reduce such expenditure on market support and in the intervening years the level of market intervention by the EU has dropped dramatically. As a result farmers are now exposed to the harsh realities of world commodity markets over which they, or indeed the EU has little influence.
Thus it is not Milk Quota nor EU market support which will dictate the survival of our dairy farmers, it is fundamentally world commodity markets and how efficiently the dairy farm is run and to whom the milk is sold, although this latter point is sometimes more a matter of luck rather than judgment. However, the one thing I think government should do is ensure farmers are treated fairly within the food supply chain; if supermarkets want to reduce the price of milk to attract customers in to their stores, that is one thing but this should not be at the cost of the producer who has no influence on this “price war”.
I am well aware supermarkets will explain that the farmers who supply them are paid a price which should return the farmer a profit but equally I would be interested to know whether all the liquid milk that is sold in a supermarket is supplied by milk secured from their own dedicated supply contracts? If not then they will be subsidising the “supermarket” price war with milk secured off other farmers who will not necessarily be being paid a “profitable” price for their milk. I would be interested if any supermarkets would like to contact me to discuss this matter in more detail because I think a clear understanding of this would be of interest to the readership of this paper.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday 12 January 2015
The Common Agricultural Policy has been reformed yet again
The Common Agricultural Policy (CAP) has been reformed yet again and at midnight on 31st December 2014 it was out with the old, as the Single Payment Scheme (SPS) ceased and in with the new, as the Basic Payment Scheme (BPS) was introduced. This is the mechanism through which farmers will receive support payments via the EU.
The new scheme is also meant to be at the forefront of the Government’s drive for “digital by default”; the idea being that in the first instance every farmer was meant to be able to verify their identity online. But in reality it appears the BPS has come too soon for this online verification process which is causing frustration to the farmers who have been invited to register so far.
This must be a big headache to the Rural Payments Agency (RPA) which is tasked with implementing the BPS. Therefore the RPA has decided to open up its helpline to allow farmers to verify their identity over the telephone which will then enable the RPA to allow farmers to access their online BPS system.
Having now done this with a few clients myself I am pleased to report that the telephone verification system appears to be working well and is reasonably easy although whether the RPA will be able to cope with the volume of calls that are now likely to flood in over the coming weeks remains to be seen.
Once farmers have then accessed the RPA’s online BPS system they need to check their business details are correct, that the appropriate people are registered against the business and that the plans of their land are up to date. At present there is not much else that can be done online but with only 4 months to go until the application deadline, there is clearly still a lot of work to be done to ensure the system becomes functional in time for farmers to be able to make their claim.
Memories of the disastrous implementation of the SPS back in 2005 are etched into the memory of many a farmer and thus there is nervousness that the faltering start to the online identity verification process may be a prelude of much worse to come. However, I do hope that this time the RPA will have learnt from the mistakes of the past.
The fact that they have organised a telephone identity verification system at relatively short notice is to be commended and I just hope the RPA’s new BPS software will be similarly user friendly.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
The new scheme is also meant to be at the forefront of the Government’s drive for “digital by default”; the idea being that in the first instance every farmer was meant to be able to verify their identity online. But in reality it appears the BPS has come too soon for this online verification process which is causing frustration to the farmers who have been invited to register so far.
This must be a big headache to the Rural Payments Agency (RPA) which is tasked with implementing the BPS. Therefore the RPA has decided to open up its helpline to allow farmers to verify their identity over the telephone which will then enable the RPA to allow farmers to access their online BPS system.
Having now done this with a few clients myself I am pleased to report that the telephone verification system appears to be working well and is reasonably easy although whether the RPA will be able to cope with the volume of calls that are now likely to flood in over the coming weeks remains to be seen.
Once farmers have then accessed the RPA’s online BPS system they need to check their business details are correct, that the appropriate people are registered against the business and that the plans of their land are up to date. At present there is not much else that can be done online but with only 4 months to go until the application deadline, there is clearly still a lot of work to be done to ensure the system becomes functional in time for farmers to be able to make their claim.
Memories of the disastrous implementation of the SPS back in 2005 are etched into the memory of many a farmer and thus there is nervousness that the faltering start to the online identity verification process may be a prelude of much worse to come. However, I do hope that this time the RPA will have learnt from the mistakes of the past.
The fact that they have organised a telephone identity verification system at relatively short notice is to be commended and I just hope the RPA’s new BPS software will be similarly user friendly.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Tuesday 6 January 2015
Slump in Milk Prices
Unfortunately for our dairy farmers the closing theme of 2014, which was characterised by a slump in milk prices, is being continued unabated in to 2015.
At the end of December, Dairy Crest announced a price cut of 1.2p/litre from 1 February 2015 for liquid and cheese milk prices, which follows hot on the heels of the 1.25p/litre cut which was announced to take affect from 1st January.
Also, just before Christmas, the farmer owned dairy co-operative Arla announced a cut of just over 2p/litre which is to take effect on 5th January. This cut will affect many dairy farmers in this area who used to belong to the British dairy farmer owned co-operative, Milk Link.
Milk Link merged with Arla back in 2012 to create a co-operative owned and run for the benefit of its 13,500 dairy members and 18,000 staff or “colleagues” as they are known. The dairy farmers come from UK, Denmark, Sweden, Germany, Belgium and Luxembourg and together Arla has become one of the top ten largest dairy companies in the world.
Thus it shows that no organization, however large, however vertically integrated or however democratically run, is immune from the downturn in the world dairy commodity markets. So all our dairy farmers, to a greater or lesser extent will have to endure difficult times over the coming months.
Rather like the recent slump in oil prices, no-one had anticipated such a sudden and dramatic fall in milk prices but unlike the oil markets where supply could be quickly reduced if oil producing countries decide to cut back production, one cannot simply cut back on milk production because unlike oil wells, cows carry on producing milk daily.
So, with the world dairy commodity markets oversupplied and no quick fix to reducing global milk supply there is no obvious end to the slump in the milk price being offered to UK dairy farmers. However, this imbalance in supply and demand will not last forever and at some stage enough dairy farmers will cease production and/or demand will pick up thereby pushing up commodity prices to a level that that farmers will once again be able to make a sensible profit.
However, in the meantime this will inevitably mean that 2015 will be the end of the road for some dairy farmers in the UK but for those that survive there should be good profits to be made at some stage in the future – the big question is when that will be?
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
At the end of December, Dairy Crest announced a price cut of 1.2p/litre from 1 February 2015 for liquid and cheese milk prices, which follows hot on the heels of the 1.25p/litre cut which was announced to take affect from 1st January.
Also, just before Christmas, the farmer owned dairy co-operative Arla announced a cut of just over 2p/litre which is to take effect on 5th January. This cut will affect many dairy farmers in this area who used to belong to the British dairy farmer owned co-operative, Milk Link.
Milk Link merged with Arla back in 2012 to create a co-operative owned and run for the benefit of its 13,500 dairy members and 18,000 staff or “colleagues” as they are known. The dairy farmers come from UK, Denmark, Sweden, Germany, Belgium and Luxembourg and together Arla has become one of the top ten largest dairy companies in the world.
Thus it shows that no organization, however large, however vertically integrated or however democratically run, is immune from the downturn in the world dairy commodity markets. So all our dairy farmers, to a greater or lesser extent will have to endure difficult times over the coming months.
Rather like the recent slump in oil prices, no-one had anticipated such a sudden and dramatic fall in milk prices but unlike the oil markets where supply could be quickly reduced if oil producing countries decide to cut back production, one cannot simply cut back on milk production because unlike oil wells, cows carry on producing milk daily.
So, with the world dairy commodity markets oversupplied and no quick fix to reducing global milk supply there is no obvious end to the slump in the milk price being offered to UK dairy farmers. However, this imbalance in supply and demand will not last forever and at some stage enough dairy farmers will cease production and/or demand will pick up thereby pushing up commodity prices to a level that that farmers will once again be able to make a sensible profit.
However, in the meantime this will inevitably mean that 2015 will be the end of the road for some dairy farmers in the UK but for those that survive there should be good profits to be made at some stage in the future – the big question is when that will be?
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Friday 2 January 2015
Splurge, purge and debt
Setting aside the peculiarity of making an Autumn Statement in early December, the dust has settled, for the time being, on the brouhaha which accompanied the Chancellor of the Exchequer’s latest diagnosis and prescription to remedy the financial ills of the nation.
The country is riddled with debt and it needs to be cured by short and mid-term pain for long term gain it seems.
It is politically acceptable to talk about the national debt again in a way it probably hasn’t been since the 1970s. Then, we were all about the Public Sector Borrowing Requirement and inflation, the 3-day week and the winter of discontent.
All the mainstream Westminster parties - and those aspiring to become so after the next election - are no longer embarrassed to mention the ‘D’ word again. And not only to talk about how indebted we are as a nation, but also to set out their stall as to how we can decrease this public debt.
It is okay to talk about repaying our debt, even if in repaying it what we actually mean is reducing the cost of servicing it.
In the fiscal year 2018-2019, implementation of the Government’s current programme will see us save £18 billion in interest payments. Borrowing is falling. Next year it will be £75.9 billion, falling from £91.3 billion this which, itself, has dropped from last year’s £97.5 billion.
We are aiming to be in the black to the tune of a £23 billion suplus in 2019-2020 but we are cautioned it could get messy in order for this to be achieved. Being in the black is a laudable business aim.
While it’s fine to talk about our national debt and how we can repay it, it’s still not fashionable to talk about our private debt in polite company as that’s even messier, but we have to start somewhere.
Tucked away in the detail and the in-depth coverage of the Chancellor’s statement was notice of our intention to pay back or, at least try to clear, the nation’s historical debts – some of which date back to the early 18th Century.
The refinancing of World War One debts in 1932 took the form of a bond replacing a gilt which was first issued in 1917. Now - well ,on 09 March 2015 to be precise - the British Government is set to redeem this bond which, in total with other war bonds since the penultimate year of the Great War, has cost £5.5 billion pounds in interest alone.
HM Treasury has made it known that it is the intention to repay, at the appropriate point, ‘legacy bonds’ which shored up borrowings against other expenses incurred during our nation’s history.
Some of these bonds and gilts financed the Napoleonic Wars, the setting up of the Bank of England and the clean-up when the South Sea Bubble burst and rocked the finances of the country in 1720.
Which, if any of these specific, perpetual debts are to be revisited have yet to be confirmed in detail but the fact that we, as a nation, are beginning to address our nationalised indebtedness tells the story of our times more than of those past.
Let’s hope we’ve eaten, drank and been merry in the past few weeks; for next May, we vote.
The country is riddled with debt and it needs to be cured by short and mid-term pain for long term gain it seems.
It is politically acceptable to talk about the national debt again in a way it probably hasn’t been since the 1970s. Then, we were all about the Public Sector Borrowing Requirement and inflation, the 3-day week and the winter of discontent.
All the mainstream Westminster parties - and those aspiring to become so after the next election - are no longer embarrassed to mention the ‘D’ word again. And not only to talk about how indebted we are as a nation, but also to set out their stall as to how we can decrease this public debt.
It is okay to talk about repaying our debt, even if in repaying it what we actually mean is reducing the cost of servicing it.
In the fiscal year 2018-2019, implementation of the Government’s current programme will see us save £18 billion in interest payments. Borrowing is falling. Next year it will be £75.9 billion, falling from £91.3 billion this which, itself, has dropped from last year’s £97.5 billion.
We are aiming to be in the black to the tune of a £23 billion suplus in 2019-2020 but we are cautioned it could get messy in order for this to be achieved. Being in the black is a laudable business aim.
While it’s fine to talk about our national debt and how we can repay it, it’s still not fashionable to talk about our private debt in polite company as that’s even messier, but we have to start somewhere.
Tucked away in the detail and the in-depth coverage of the Chancellor’s statement was notice of our intention to pay back or, at least try to clear, the nation’s historical debts – some of which date back to the early 18th Century.
The refinancing of World War One debts in 1932 took the form of a bond replacing a gilt which was first issued in 1917. Now - well ,on 09 March 2015 to be precise - the British Government is set to redeem this bond which, in total with other war bonds since the penultimate year of the Great War, has cost £5.5 billion pounds in interest alone.
HM Treasury has made it known that it is the intention to repay, at the appropriate point, ‘legacy bonds’ which shored up borrowings against other expenses incurred during our nation’s history.
Some of these bonds and gilts financed the Napoleonic Wars, the setting up of the Bank of England and the clean-up when the South Sea Bubble burst and rocked the finances of the country in 1720.
Which, if any of these specific, perpetual debts are to be revisited have yet to be confirmed in detail but the fact that we, as a nation, are beginning to address our nationalised indebtedness tells the story of our times more than of those past.
Let’s hope we’ve eaten, drank and been merry in the past few weeks; for next May, we vote.
Will Mooney MRICS
Partner
Commercial, Cambridge
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