NFU Mutual is urging Chancellor of the Exchequer, Jeremy Hunt, to help farming families by thawing frozen tax thresholds ahead of his spring budget next week.
The National Farmers’ Union’s (NFU) rural insurance branch has said that it is concerned the government’s policy of keeping income tax, inheritance tax and child benefit tax thresholds unchanged for years despite high inflation is affecting the personal finances of farming families.
Hunt will deliver his spring budget next Wednesday (March 15) to the House of Commons, and NFU Mutual is calling for him to change some of the tax thresholds to help families out amid rising energy costs and the ongoing cost-of-living crisis.
Sean McCann, chartered financial planner at NFU Mutual, said: “Rising incomes and asset prices mean more and more farmers are being drawn into 40% and 45% income tax rates, the child benefit tax charge, and inheritance tax.
“Thawing some of these frozen thresholds in the spring budget by uprating them in line with inflation will help many, including farmers, deal with rising bills.”
McCann said inheritance tax is unnecessarily complicated and ripe for reform.
“Getting rid of the myriad of gifting allowances in favour of one annual gifting allowance of £15,000 would help simplify the tax for the increasing number of families who fear being caught by inheritance tax,” he said.
He also called for the amount people can invest in a pension without attracting a tax penalty to be increased. This, he said, will help farmers plan ahead for retirement and avoid being a financial burden on younger generations.
“Although farmers typically work late into life, many rely on a personal pension as an independent source of income, allowing them to gradually hand over the farm to the next generation,” he said.
“Increasing the amount you can accumulate in pensions without incurring a tax charge will help farmers plan how best to hand the farm down to the next generation.”
