Joseph Lawrence Chartered Tax Advisers & Accountants

18/11/2024

More tax trouble on the way for farmers? Oh and anyone else in business thinking of buying a pick-up truck - builders, plumbers, joiners etc......sole traders, partnership or companies!

As of 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax, double cab pick-up will be treated as cars for the purposes of capital allowances, Benefit-in-Kind (BIK), and certain deductions from business profits.

The good news is that the VAT treatment of double cab pick-ups remains unchanged. HMRC will continue to treat double cab pick-up vehicles as goods vehicles for VAT purposes as long as they have a minimum of one-tonne payload, enabling businesses to reclaim tax paid in accordance with the standard regulations.

The previous government had attempted to introduce the same change once before. On 12 February 2024, HMRC announced that their interpretation of the legislation concerning the favourable tax treatment of pick-up trucks would be altered starting from 1 July 2024. However, just a week later, HMRC determined that the proposed change from July 2024 would impact businesses and individuals in a way that does not align with the broader objectives of the government. Well, until now!

08/11/2024

The government has announced it will change the rules for Inheritance Tax, including APR (Agricultural Property Relief) and BPR (Business Property Relief) on farmland and business assets claiming it is not “affordable” to keep the current system. This means an effective tax rate of 20% on agricultural assets valued over £1 million – although there are other reliefs available that can also be used.
Watch this clip to the end to understand what this is all about from a farmer's perspective; a good basic explanation of how APR works in real life farming. (but if you couldn't care less about farming you might like his cars over on Harry's Garage https://www.youtube.com/ or you may prefer to watch paint dry in which case https://www.youtube.com/watch?v=PLOPygVcaVE ... Personally I prefer the cars!)

There has been suggestion that these new rules are aimed at curbing tax planning by the wealthy buying up farm land and pretending to farm (keeping a couple of ewes and a few hens) to secure valuable agricultural reliefs. But is this really happening in Wales?
As regards the new rules and thresholds, should they be increased and could they have been better thought out to protect real Welsh farmers and homegrown food? After all it's not difficult to spot a real farmer - as pointed out in case law, if they look like a farmer, dress like a farmer, speak like a farmer and act like a farmer then they're probably a farmer!
Will all this change be good for Welsh farming in the end?

In last week's Budget, the new Labour Government introduced revised tax rates for Inheritance Tax. From April 2026, the 100% Agricultural Property relief wil...