Catherine Vickery, rural tax specialist at accountant Old Mill, said she was surprised that taxes were not hiked more sharply. “There were even some extra giveaways, which was amazing.” However, Mr Osborne did announce drastic changes to Capital Allowances, Capital Gains Tax, Income Tax and VAT, all of which would affect rural businesses.

“One of the key changes is the reduction in the Annual Investment Allowance, from £100,000 to £25,000 from April 2012. The writing down allowance for capital expenditure over that level will also be reduced, from 20% a year to 18%.” Although businesses would still receive the same level of tax relief, it would be spread over a longer period of time. “If you do have major expenditure coming up, make the most of your £100,000 annual allowance in each of the two tax years before this change comes into force.”

From midnight yesterday (22 June), Capital Gains Tax (CGT) rates increased to 28% for higher rate taxpayers – considerably lower than the 40-50% rate many expected. Lower rate taxpayers would retain the existing 18% rate, with gains over and above the higher rate income tax threshold of £43,875 levied at the new 28% rate.

“Anyone selling or gifting assets could face higher CGT rates – but those selling an entire business will benefit from the higher band for Entrepreneurs’ Relief,” said Mrs Vickery. The threshold increased from £2m to £5m, under which gains would be taxed at 10%.

Those renting furnished holiday lets were pleased to hear of plans to reinstate tax reliefs like Capital Allowances on furnishings, offsetting losses against other income, and Entrepreneurs’ Relief upon sale of the business. “A lot of people, in the West Country in particular, run holiday lets as a business, and deserve the same tax relief as any other business.”

Another benefit for local businesses would be the planned holiday from National Insurance (NI) for new business enterprises, she added. “Start-up businesses outside London and the South East are to be exempt from NI for first 10 employees, up to £5,000 per person. That equates to a tax break worth up to £50,000 for 400,000 businesses over three years – a valuable encouragement for brave new ventures.”

A £1000 increase in the personal allowance for Income Tax would save lower rate taxpayers £200 a year, while falling Corporation Tax rates, from 28% down to 24% for large companies, and 21% to 20% for small companies, were also to be welcomed, said Mrs Vickery.

However, the increase in Value Added Tax (VAT), from 17.5% to 20% from 4 January 2011, would make the cost of living more expensive. “Given that just a year ago we were at 15%, that is quite a steep rise. It will add to the cost of almost everything, and will make cash flow more difficult for VAT-registered businesses.

“That said, we were prepared for swingeing allowance cuts and steep tax rises in this Emergency Budget. Many of the proposals made by George Osborne were less onerous than expected. Rural businesses now need to ensure they understand the implications of such wide-ranging changes, and take professional advice to mitigate higher tax bills in the future.”

For more information contact Catherine Vickery on 01935 426181, or e-mail: catherine.vickery@oldmillgroup.co.uk.

The firm, which recently opened a new office in Melksham, Wiltshire, has appointed James Fowler to spearhead a smaller business team in Exeter, which will cater for businesses with turnovers below the audit threshold of £6.1m.

Having worked in Old Mill’s Yeovil office since 2005, James is looking forward to the challenge of heading up a new team. “All my background is in owner-managed businesses – it’s a very broad area and I love really getting to know a client’s business inside out and being able to help them to meet their desires and objectives. It’s all about finding ways to mitigate tax and save my clients money.”

Partner Guy Eggleton, who launched the Exeter office in 2005, says the expansion will enable other staff to focus more on their individual specialisms. “The office now has 15 full-time staff, including specialists in financial services, rural services, corporate finance, auditing, VAT and tax. We aim to provide the highest quality service to our clients and recognise that this requires a specialist approach, tailored to our clients’ specific needs. James’s new position will deliver this approach to smaller businesses which have their own particular needs and demands.”

Married to Clare with four daughters, James is passionate about the West Country, and a keen sportsman and mountain biker.

Holding its inaugural Gold Cup networking event at Exeter’s St. James’s Football Club on Friday, Old Mill welcomed more than 70 South West businessmen and women with an in-house bookmaker and special guest speaker. A client of Old Mill’s for more than 15 years, racehorse trainer Paul Nicholls filmed a special insider’s view of his stables in Somerset, where he trains Kauto Star and Denman, which had been tipped to battle it out to win the world famous Cheltenham Gold Cup.

“We have 120 horses in training, and I have been with Old Mill since a local cheese maker recommended them,” said Mr Nicholls. “They have taken a lot of interest in my business and I couldn’t ask for any better.”

Old Mill obtained a Martin Alford print of Denman, signed by the artist and Mr Nicholls, as a prize for its Gold Cup sweepstake. Predicting both the winner, Imperial Commander, and second-placed Denman to claim the prize was solicitor Rachel Buckley from Exeter-based Hartnell Chanot. Another signed racing print and a signed copy of Paul Nicholls’ autobiography went to the second and third placed contenders.

“I am very pleased to be able to thank our clients and associated businesses by holding this event,” said Old Mill’s Simon Cole. “It is great fun to get everyone together for a bit of tax-planning with the bookmaker – and obviously everyone’s winnings are tax free!”

Caption: Old Mill’s Simon Cole presents Rachel Buckley with her signed print of Denman at the firm’s inaugural Gold Cup networking event.

The firm, which also has offices in Shepton Mallet, Yeovil and Exeter, merged with long-established Devizes accountants LE Bull and Co almost a year and a half ago but has expanded considerably since then and needs a new base to accommodate the increase in staff.

“When we merged with LE Bull and Co in November 2008 we had 12 office-based staff in Devizes, this has now grown to 19 and with a need to increase to 25 in the short term the existing offices are bursting at the seams,” explains Mike Butler, Finance Partner at Old Mill.

He continued, “We are moving to the Challymead Business Park in Melksham, where the modern offices will enable us to continue to grow and provide a home for up to 40 staff.”

Mike says the move will enable Old Mill to provide services to a much wider range of local businesses.

“We will now be able to make our proactive accountancy services available to all Wiltshire businesses, large and small and across all sectors of industry,” he said.

“And with the addition of newly appointed IFA Paul Heaphy we will also look to expand the financial planning team that we set up in the region this summer.”

Paul Neate, the partner in charge of the Melksham office, says although he will be sad to leave Devizes, he is looking forward to the challenges that lie ahead.

“We had spent nearly 18 months searching for an alternative office in town but unfortunately there was just nothing suitable available,” he said.

“We will be very sad to leave our offices in Devizes where I personally have worked for 30 years, but look forward to continuing to provide a high level of service to our loyal existing clients and from that base serving many new friends in the future.”

Despite the credit crunch – which hit many local businesses hard – Old Mill went from strength to strength last year, opening a fourth office and making a series of expansions and promotions. And 2010 promises to be just as successful for the firm, which is starting the New Year as it means to go on by bringing Andrew in as Partner at its Shepton Mallet office.

The 45-year old, who is relocating to the West Country from Yorkshire, says he is looking forward to moving to the region and getting his teeth into his new role.

Andrew comments “My wife and I have visited the South West on holiday each year and we have family here, so the decision to move to Somerset was certainly not a hard one. I am really lucky to be able to relocate my family to North Cadbury and work just down the road in Shepton Mallet,” he said.

After graduating with a degree in accountancy, Andrew joined Grant Thornton in Bradford, where he qualified as a Chartered Accountant and gained more than 20 years corporate experience. In his last role as a Business Advisory Partner at the firm, Andrew looked after a large portfolio of owner managed businesses and smaller quoted companies and feels his experience will allow him to help Old Mill to continue to grow their business in the region.

“Old Mill work closely with their clients to provide the highest possible service and advice to help them through these turbulent times, and I am really looking forward to being a part of that ethos, and getting to know the local businesses community within the Somerset and Wiltshire area.”

Jolyon Stonehouse, Managing Partner at Old Mill comments “I am delighted that Andrew has decided to join our corporate team in Shepton Mallet, his enthusiasm and expertise will be crucial in developing the good work that the team achieve, we warmly welcome him to Old Mill and look forward to working with him.”

If you would like to contact Andrew please call 01749 335033 or email andrew.moore@oldmillgroup.co.uk

Over the past few months Old Mill has found two areas where their constructive help they has been of great help. The first is dealing with bank managers, especially where there is a need to gain extra funding, or to rearrange existing funding. Here measures such as identifying special items, bolstering the balance sheet, changing the year end or providing a robust narrative have been show to be invaluable.

The second area is in the perennial fight with the tax man. The government is caught in a paradox where they want to both encourage businesses to grow but at the same time need to increase taxes to balance their books. This results in a fluid situation where Old Mill can help clients both defensively, to avoid some of the traps, and positively, to take advantage of some aspects of the tax regime which still look attractive.

If you would like a free no obligation meeting to see if Old Mill can help you please email yeovil@oldmillgroup.co.uk

 Since buying out of national firm Tenon in August 2006, Old Mill, which has branches in Shepton Mallet, Yeovil and Exeter and recently merged with LE Bull & Co in Devizes to create a fourth office, is going from strength to strength.

 “Due to the growth and success over the past three years, we are strengthening our support functions in order to set up for further growth and improved customer service,” said Jolyon Stonehouse, managing partner at Old Mill, “It’s a really positive story for local business.”

 Group marketing  manager  Alan Stone and  Compliance Manager  Duncan Parkes are both being promoted to associate director level, while finance director Ian Carlson will become group finance and operations director.

 Alan, who lives in Shepton Mallet with his wife and two sons and works at the Shepton Mallet office, has been with Old Mill for six years his promotion is in recognition of the critical role that his department will play across the business as it continues to evolve.

 “Alan’s high level of commitment and enthusiasm will ensure that our marketing strategies are at the core of our business development activity to
provide maximum impact and support moving forwards,” said Mr Stonehouse.

 The 52-year-old says he is looking forward to his new role; “I have seen a lot of positive changes within the business over the years,” he said, “and this is a really exciting opportunity both for me and for the business as a whole.”

 Duncan, aged 35, lives in Exmouth and has been with Old Mill in Exeter for 18 months. He is married with a young and has more than eight years financial services experience.

 “I will be taking on additional responsibility for raising compliance I am really looking forward to getting my teeth into my new role,” he said.

 Ian, who is 38 and married with three sons, lives in Taunton and has been with Old Mill since March 2008. He qualified as accountant with Andersons in 1995 and worked with Dresdner and M&S before joining Old Mill’s Yeovil branch as finance director.

 In his new role he will hold overall responsibility for the management of the support teams as well as finance in order to improve service, communication, strategy and project implementation

 “This is a really exciting time for Old Mill. It is fantastic that in these tough economic times our business is experiencing such positive growth,” he said. 

The firm, which has branches in Shepton Mallet, Yeovil, Exeter and Devizes realises that owner managed companies need to know that they are getting a personal service from their accountant.

“All too often, local, owner managed businesses don’t receive the personal service that they should; at Old Mill, I feel we have a unique offering,” said Chris Bowles, who has recently been promoted to Director of business services.

“Not only do we know the local area, but we have a number of in-house specialists that can offer each client a tailored, personal service, and I feel that the sort of service we can offer is particularly important when times are tough, like they are now,” he said.

As well as promoting Chris with the aim of strengthening the firm’s offering to local business, Old Mill has also appointed Jake Jukes, who until moving to the business services team, worked with Bath-based Moore Stephens Chartered Accountants.

Jake says he joined Old Mill because he shares the firm’s values and beliefs; “I really like the way that at Old Mill, clients are given a very pro-active forward thinking value added service where their needs are always put first,” he explains, ” and feel one of the firm’s strengths is a desire to deliver as promised, offering an inter-personal service that guarantees clients always have a point of contact should they need it.

“And with news this week that one in every 56 businesses is expected to fail in 2009* it is more important than ever that our local businesses are given the support they need to see them through these tough financial times.”

Many landowners have erected farm buildings and then let them out, changing their use from VAT-rated to VAT exempt. “If you claimed the VAT back on the building work, and then change the use from agricultural to a commercial let, you could end up having to repay the VAT,” says Mark Peters, director of Old Mill’s VAT consultancy.

With HM Revenue & Customs targeting this area for inspection, farmers could end up having to pay back thousands of pounds in tax, he adds.

Problems typically arise when farmers change the use of a new property before fulfilling their original intentions, hence altering the VAT situation. So if a building was intended for agricultural use, but was let out before being used for the farm, the landowner could have to repay the VAT on the build. “One solution might be to elect to charge VAT on the rental income,” says Mr Peters.

But if the owner actually satisfied the original agricultural use they could safely change the use without incurring a VAT liability, he adds. “However, if HMRC believes there was always an intention to use it for dual purposes, then they would argue that a only a proportion of VAT should have been claimed initially.”

Adjustments can also arise even when the intended use has been carried out, if the expenditure involved is significant, warns Mr Peters. “In some circumstances the use of a property must be monitored for 10 years, with any changes in the original level of taxable business resulting in a VAT adjustment.”

Of course, the regulations could also work in landowners’ favour. Anyone building a residential property intended for a VAT-exempt long let, who instead puts it to use as holiday accommodation, could make a belated claim to recover the VAT paid on the build, for example.

“However, every situation is different, and with HMRC paying closer attention to this area, anyone planning to change the use of a building should seek professional advice.”

Old Mill Managing Partner Jolyon Stonehouse comments, “We have been enjoying rapid organic growth, increasing both income and headcount by more than 10% each year since the management buy-out. However we now feel it is appropriate to enhance our business further by merging with LE Bull and Co. Their client base fits well with our own, and they share our philosophy of providing first class client service while being an outstanding place for staff to work. We are excited by the prospect of a Wiltshire office which will help us serve our considerable number of existing clients in the county and provide a base to further grow our business there.”

All members of the staff of L E Bull and Co will be taken on by Old Mill and there are expansion plans for the office as Old Mill introduce their full range of client services.

Paul Neate senior partner of Bull and Co observes “The synergies between the two companies are excellent. We specialise in looking after farming clients and the Old Mill rural services teams are already the leading supplier of accounting services to West Country agriculture.  Our existing clients will be able to benefit from the specialist tax and financial services advice that is part of the Old Mill package. .”

Paul will become a partner in the Old Mill Rural Services team and John Smith, his fellow L E Bull and Co partner, will become the Senior Manager in the Rural Service team.

Old Mill already operates from offices in Shepton Mallet and Yeovil and earlier this year launched a full service offering office in Exeter.

“You may have to work harder but the property business is still alive,” said Mr Gregory. “The market is certainly not dead, deals are still being done and sales are still being made.”

He did say though, that some responsibly must lie with the Government saying that Gordon Brown needs to “make an early U turn on rates on empty buildings.”

The legislation, which only came into force this April, rules that properties that have been empty for more than three months will no longer receive the 50 per cent relief from business rates, with industrial properties losing the relief after six months of being unoccupied.

The new rules aimed to ensure that landlords let properties out; however Mr Gregory claims it is actually having the opposite effect.

“It is now discouraging developers from advancing new projects,” he said, “and means that existing companies are less likely to move and leave a vacant office without another tenant ready to move in.”

Also speaking at the event was Bruce Lockhart, tax partner at Old Mill accountants and financial advisers. Mr Lockhart spoke about the tax issues that affect the property market, particularly the new tax allowance on integral fixtures and energy efficient systems in new buildings, which he called a “rare positive change”.

The meeting was the third quarterly meeting this year of the Western Business Forum and was organised by LloydsTSB, solicitors Thring Townsend, Old Mill and executive coaches, Inside Out. Every quarter a new discussion point arises and this time their attention was turned to property. The next will take place on Thursday 4 December at Cumberwell Park Golf Club when the topic will be “Planning to make it happen in 2009.” For more information please go to www.westernbusinessforum.co.uk or call 01749 335007.

“Even the purchase of a moderately priced tractor for, say, £30,000, could reduce profits enough to not only reduce income tax and National Insurance payments, but also to facilitate a tax credit claim,” says Rural Tax Planning Specialist Catherine Vickery.”Tax credits can be very valuable where profits are low in the year and can, depending on individual circumstances, entitle you to thousands of pounds.” The family element of child tax credit is available where income is up to £58,000, for families with up to two children. However, claims can only be backdated by three months, so if profits are likely to fall within tax credit limits for the year it is important to submit provisional claims as soon as possible, she adds. “With weakening commodity prices and the credit crunch underway this extra income could provide a welcome boost.” On the flip side, the fluctuation in profit levels created when claiming the AIA can have a detrimental impact when applying for a loan or mortgage. “Setting up to £50,000 against income in a single year means profits may swing wildly from one year to the next, particularly for farming businesses which often have high capital expenditure one year, but low the next,” says Mrs Vickery. “Farmers making a substantial AIA claim could wipe out profits altogether.” It is therefore essential to consider the timing of making such a claim so as not to jeopardise a loan or mortgage application. However, there may be ways to explain the position to potential lenders, such as including a deferred tax adjustment in the accounts, she adds. “That seems more sensible than accepting a higher tax bill just to facilitate borrowing.”

For more guidance on tax credit entitlements and AIA claims, contact Kim Davis, Tax Consultant at Old Mill Rural Services, on 01935 709338.

Businesses with finance scattered across a number of different providers could save money by consolidating their borrowing into one loan or mortgage, he explains. “Despite the credit crunch agricultural banks are still very much open for business and there are still some good deals out there.”

Improved profits in some agricultural sectors could either be used to reduce debt or reinvest in the business, and farmers releasing larger capital sums could make wise use of changes in the tax regime, he adds.

“Anyone with non-business assets like buy-to-let properties or quoted shares could benefit from recent changes to CGT, which have reduced tax on non-business capital gains from up to 40% to a maximum of 18%.”

For example, a rental property purchased five years ago which now stands a capital gain of £150,000, owned jointly by a husband and wife paying the higher tax rate, could be disposed of with a tax liability of £27,000 compared to up to £54,000 under the old regime. “Now could now be the ideal time to release funds from such investments to repay business borrowing or fund new projects,” says Mr Vickery.

New investments, such as expanding a dairy enterprise or building a new grain store, should always be carefully considered from both a financial and a tax perspective. “The phasing out of Agricultural Buildings Allowances will play an important part in your calculations, but there are other new tax reliefs, including changes to Capital Allowances, which could be particularly beneficial,” he adds.

“Whatever your situation, it is worth speaking to your bank manager and scouring the market to get the right finance package to suit your business. If you are considering making new investment decisions or disposals take professional advice – this could be the right time to make changes for the better.”

For more information contact:

Alan Stone, marketing manager – Tel: 01749 335007, or e-mail: alan.stone@oldmillgroup.co.uk

About Old Mill Rural Services

Old Mill accountants and financial advisers employ 160 staff in three West Country offices. The Rural Services teams are headed by Partners Mike Butler (Yeovil) and Ian Sharpe (Shepton Mallet). Looking after nearly 1,000 farmers they are one of the leading specialist farm accountants, and are happy to help with any financial and tax-related enquiries from the media.

From July 1 2008, Fuel Advisory Rates for company provided petrol vehicles with an engine size of 1400cc or less will go up 1p to 12p, for diesel, the rise is 2p up to 13p. For vehicles with engine sizes up to 2000cc, the rise is 2p for both petrol and diesel, going up to 15p and 13p respectively. And for larger vehicles, petrol reimbursement has gone up from 19p to 21p and diesel from 14p to 17p. (See table below for full rate information).

But, for those who drive their own cars, the AMAP (Approved Mileage Allowance Payments) hasn’t changed, in fact, at 40p for each business mile up to 10,000 and 25p for each over 10,000, it has remained static since 2002.

Despite the fact that evidence from both the RAC and the AA suggest that the true cost of private mileage is now 50p, and many groups are actively lobbying the Government for a long overdue increase, HMRC says its research shows that no changes are necessary in the foreseeable future, and this says Andrew Wholey, tax consultant at Old Mill Financial Services, means that employees undertaking business mileage in a private vehicle are losing out.

“Due to the fact that Government has refused to raise the AMAP, many employees undertaking business mileage in their private car incur actual costs in excess of the rate at which they can be reimbursed by their employer,” said Mr Wholey.

“While employees who drive company owned vehicles have seen regular increases over the years – 50 per cent since 2002 – it is an entirely different story for employees who do not benefit from the use of a company car and have to pay all their own running costs – not just fuel, but tax, insurance, depreciation and any other costs associated with running a car.

“This group are really losing out due to the fact that the AMAP – which is supposed to take all the costs of running a car into account – has not seen an increase in six years, despite the fact that in that time, the cost of fuel has risen from 74p a litre in June 2002 to 118p a litre now.”

And, says Mr Wholey, this situation is made worse still where instead of adopting the AMAP, employers use the lower Fuel Advisory Rates for reimbursing the cost of fuel and business mileage undertaken in an employee’s private car. Employers too, are trying to contain costs and this practice is increasingly common.

“In this situation,” he explains, “it is left to the employee to claim a tax deduction on their personal tax return equal to the difference between the two contrasting rates.

“This can be a daunting prospect for some, and many simply don’t bother. But they should, because, for a higher rate tax payer undertaking 6,000 business miles, the difference between the 40p AMAP and the 15p Fuel Advisory Rate is 25p per mile – an annual tax save of £600.”

Although, says Mr Wholey, an increase in the AMAP is long overdue, in the meantime he advises employees who drive their own vehicles that are only being reimbursed using the lower Fuel Advisory Rates (or another rate, lower than the AMAP) to at least ensure that they benefit from the additional tax relief they may be entitled to.

“Claiming back the difference between the Fuel Advisory Rate and the AMAP isn’t as complicated as they may think and in this way they can mitigate the impact of a “double whammy” as the costs of fuel continue to escalate,” he said.

Ends

Previous Rates

Guy, who qualified as a Chartered Accountant in 1990, worked as a Corporate Finance specialist for six years with a top 4 accountancy firm before joining Old Mill’s Exeter branch in 2005 to set up a new Corporate Finance team for the South-West.

Not only has Guy been instrumental in the establishment and success of that team, but he has also played a significant part in the development of the Exeter office as a whole.

Since his appointment, the Exeter office has expanded significantly and can now offer a full service thanks to corporate finance specialists, tax experts, an accounts and audit team, rural and farm accounts specialists and independent financial advisors. Old Mill financial services is the largest independent firm of IFAs in the region and one of only a few with Corporate Chartered Financial Planner status.

“Guy’s successful expansion of Old Mill’s service offering from Exeter has led to his well deserved elevation to partner,” says managing partner Jolyon Stonehouse.

“Guy has been instrumental in the creation of the Old Mill Corporate
Finance service for the whole of the South West, allowing all three of Old Mill’s branches – Exeter, Shepton Mallet and Yeovil to benefit from his hard work. Having Guy on board as a Partner is excellent news as his promotion allows his respected expertise to benefit the business and the region as a whole.”

Guy says he is delighted with his promotion. “I am really looking forward to my new role as Partner and the challenges it will bring,” he said.

“Since I started at Old Mill, the Exeter office’s offering has changed significantly; we have brought together quality accounting, tax and financial services in order to provide an integrated service for our clients and I am excited about taking the business further forward still.”

With climate change a hot political topic, the opportunities for everyone to do their bit are growing fast – and can have a dramatic impact on both the environment and the pocket, says accountant Old Mill.

It is supporting the Eco-Gym at this year’s Royal Bath & West Show, in a bid to show people how easy it can be to become eco-friendly. Visitors to the Show will be able to burn off a few calories while making a delicious smoothie on a special blender bike, or use their own muscles to generate electricity for Scalextric and toy train races.

“This is an area where people can visualise energy,” says John Jackson, partner at Old Mill. “They can find out just how hard it is to keep one light bulb on, or run a TV, or even boil a kettle. They can lift the weight of their own carbon footprint and by using their own energy see the size of the problem facing the planet.”

The Eco-Gym is part of the Show’s Eco-Zone, a fascinating area where visitors can learn all about environmentally-friendly technology, from renewable fuels and solar energy to green packaging and anaerobic digestion.

Experts will also be on hand to offer one-to-one advice on becoming more energy efficient, and trade stands abound in commercial options available to farmers, individuals and other businesses.

“The Eco-Zone is a small but essential step in the long road to public acceptance of the need for change, and a precursor to more ambitious intentions for the showground,” says Archie Montgomery, who farms in North Cadbury, Somerset, and helped to create the Eco-Gym. “For some years it has been obvious that Britain, with its historical abundance of coal, oil and gas, has taken a very different view of national energy security compared to its European neighbours.”

Continental countries with poor fossil fuel resources have successfully developed renewable alternatives, many of which rely on farmers and the land-based industries to provide the raw materials – including wood, crop-based biofuels or waste products.

“This has improved farmers’ livelihoods and income security and helped to create wealth in local communities,” says Mr Montgomery. “We have a lot to learn in this country, and the Bath & West Show is an ideal opportunity to publicise information about sustainability which is already household knowledge amongst our European neighbours, and in the process promote the market for the land-based renewable sector.”     

• For full details of the Show, which will be held from May 28-31, visit http://www.bathandwest.com/ or ring the Bath & West Showground on 01749 822200.

• Staff from Old Mill Rural Services will be available to discuss the benefits of adopting environmentally-friendly practices, as well as any financial and tax-related issues, at the Old Mill stand in the Showering Pavilion.

For more information contact:
Alan Stone, marketing manager – Tel: 01749 335007, or e-mail: alan.stone@oldmillgroup.co.uk

About Old Mill Rural Services
Old Mill accountants and financial advisers employ 160 staff in three West Country offices. The Rural Services teams are headed by Mike Butler (Yeovil), Ian Sharpe (Shepton Mallet) and Andrew Vickery (Exeter). Looking after nearly 1,000 farmers they are one of the leading specialist farm accountants, and are happy to help with any financial and tax-related enquiries from the media.

Andrew first began his training 28 years ago at Arthur Anderson & Co in London, where his specialism was US and expatriate taxation. Most recently, he held the position of Director of Tax & People Services at KPMG, where his main area of expertise was International Executive Services.

Andrew began temping at Old Mill in January, where it became clear that his knowledge of international tax was very valuable to the Tax Planning Team; by February 11, he had joined the Yeovil office permanently as a tax consultant.

He says he is really looking forward to the new challenges working at Old Mill will bring, and despite his specialism in international tax, is keen to apply himself as a more general consultant.

“Over the past few years, I have been specialising in one particular area, but this new role is giving me the opportunity to get back up to speed with all the broader aspects of UK taxation, like corporate, capital gains and inheritance tax.”

The 49-year-old says he was attracted to Old Mill because of the firm’s reputation and the fact that he could relocate to his favourite part of the country.

“I had a real desire to change lifestyle and relocate from the Thames Valley because it is my favourite part of England,” said Andrew, who recently moved into his new home on the Dorset Somerset border with his wife and their many pets – two lurcher dogs, four chickens and a cat.

He says that once he had decided to move to the area, the choice of where to work was easy, “Within this market I was attracted to Old Mill because of its reputation, multidisciplinary approach and vision,” he said.

Bruce Lockhart, tax partner at Old Mill says Andrew is going to be a very valuable asset.

“As well as many years of international tax experience, both individual and corporate, and knowledge of mainstream UK employee taxation, Andrew has a great deal of sales and marketing experience that will add to Old Mill’s already impressive tax planning credentials and their ability to assist clients within the increasingly complex world of tax compliance,” he said.

Ends.

Notes to editors

For more information contact
Alan Stone – Marketing Manager
Tel: 01749 335007
E-mail: alan.stone@oldmillgroup.co.uk

To say the meeting was topical was to put it mildly. Jeavon Lolay, economist with LloydsTSB gave an up to the minute forecasts for the economic outlook in the light of the turbulent times on the world’s stock markets this week. However even this was upstaged in timeliness by Bruce Lockhart, Tax partner with Old Mill Accountancy who gave a workshop on Capital Gains Tax as the latest details were emerging and being fed to him by a colleague over a mobile phone.

Although the economic outlook given by Jeavon was not as bleak as some might have anticipated he did focus on the particular problems that face the UK economy. In particular the fiscal deficit which is now running at around 3% of GDP. After 15 years of economic growth he likened this to ‘failing to fix the roof whilst the weather is dry.’ Given inflationary pressures on energy and food and a knock on from inflation in the far east Jeavon could not see scope for many cuts in the interest rate and unlike the USA and most of Europe there is no room for tax cuts to stimulate the economy.

Businessmen at the meeting also focused on how they could improve their own personal achievements in 2008 in a lively interactive session led by personal coach Nigel Linacre of consultants Inside Out. The feed back from those attending was very positive and people are already looking forward to the next forum meeting on 24 April.

Ends.

Notes to editors

For more information contact
Alan Stone – Marketing Manager
Tel: 01749 335007
E-mail: alan.stone@oldmillgroup.co.uk

About Old Mill Accountants and Financial Advisers
Old Mill accountants and financial advisers employ 160 staff in three West Country offices. The rural services teams are headed by Partners Mike Butler (Yeovil) and Ian Sharpe (Shepton Mallet). Looking after nearly 1,000 farmers they are one of the leading specialist farm accountants, and are happy to help with any financial and tax-related enquiries from the media.

Chancellor Alistair Darling today announced a new “Entrepreneur’s Relief”, providing a special tax rate of 10% on the sale of businesses, up a limit £1m. Capital gains over the £1m limit will be charged at the new CGT flat rate of 18%, due to be introduced in April.

“This new relief is worth £80,000 to an individual, if they use the full allowance over the course of their lifetime,” says Catherine Vickery, rural tax specialist at Old Mill’s Yeovil office. “But the problem is that it only applies to the sale of whole businesses or interests in a business.”

The relief will also apply to business assets, as long as they are sold complete with the business, but importantly it will not apply to individual business assets like fields or buildings, if they are sold in isolation.

“Under the current tax regime, farmers seeking to sell or gift business assets will qualify for Taper Relief and Indexation Allowance, reducing the tax rate to a maximum of 10%,” says Mrs Vickery. “But from April, these assets will be chargeable at the new rate of 18%, a massive hike in tax for rural businesses.”

Landowners letting out commercial units or farms will also not qualify for the relief, following a drastic tightening of business classification. “There are plenty of farmers out there who have been encouraged to diversify, who will now be penalised with an 80% increase in tax,” says Mrs Vickery. “Although some people are acclaiming Alistair Darling’s latest U-turn as a victory for small businesses, the reality is that only those who a selling up and getting out will benefit.”

Even those seeking to dispose of entire businesses should consider the loss of Indexation Allowance from April 6, as they may still be better off taking action before the new rules come in.

“There are ways to crystallise capital gains before April, to make the most of Taper Relief and Indexation Allowance,” says Mrs Vickery. “There may also be an opportunity for people to split up their existing business to allow for separate disposals in the coming years. However, as always, the devil is in the detail so it is essential to take professional advice and act now, before it is too late.”

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Notes to editors

For more information contact
Alan Stone – Marketing Manager
Tel: 01749 335007
E-mail: alan.stone@oldmillgroup.co.uk

About Old Mill Accountants and Financial Advisers
Old Mill accountants and financial advisers employ 160 staff in three West Country offices. The rural services teams are headed by Partners Mike Butler (Yeovil) and Ian Sharpe (Shepton Mallet). Looking after nearly 1,000 farmers they are one of the leading specialist farm accountants, and are happy to help with any financial and tax-related enquiries from the media.

The Somerset-based accountant runs its six-monthly online survey to gauge how local businesses are reacting to some of the topical issues of the day. Client Paul Knight filled in the survey, and won a case of wine for his efforts. “I am delighted – it is a long time since I won anything – although I have presented plenty of prizes to clients in competitions I have run,” he says.

Paul has run his business in Street for about five years, and before Christmas took over the long established agent Chamberlaine Brothers and Edwards in Shepton Mallet.

Old Mill’s online survey revealed two particular areas of concern for businesses in the region – red tape and flexible working. Along with many other respondents, Paul found red tape to be a particularly time-consuming problem. “The red tape around health and safety is a real hassle,” he says. “It takes a disproportionate amount of time – especially as estate agency is a reasonably low risk business.”

The survey revealed that almost 80% of West Country businesses believe the impact of red tape will increase over the next year, despite government promises to the contrary.

It also discovered that more than 40% of respondents find it very difficult to meet government-backed requests by employees for flexible working arrangements. Although flexible working can extend considerable benefits to businesses, including better staff morale and greater efficiencies, it can cause problems for small businesses like Paul’s.

“I like the idea and indeed sometimes work from home myself,” he says. “But with small sales teams who have to be able to cover the work requirements, extending workers’ right to flexible working is a potential problem for us.”

Old Mill’s next survey will be online at www.oldmillgroup.co.uk from the end of January. All respondents will be entered in a prize draw for a case of wine.

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Notes to editors

For more information contact
Alan Stone – Marketing Manager
Tel: 01749 335007
E-mail: alan.stone@oldmillgroup.co.uk

About Old Mill Accountants and Financial Advisers
Old Mill accountants and financial advisers employ 160 staff in three West Country offices. The rural services teams are headed by Partners Mike Butler (Yeovil) and Ian Sharpe (Shepton Mallet). Looking after nearly 1,000 farmers they are one of the leading specialist farm accountants, and are happy to help with any financial and tax-related enquiries from the media.

In a survey carried out by Old Mill accountants and financial advisers, 78% of businesses in the south-west expected the burden of red tape to increase, with 19% forecasting it to stay the same. “This is a real reflection of the growing impact red tape has on businesses, despite government assurances to reduce the regulatory burden,” says Corporate Partner Jolyon Stonehouse.

“Fewer than 4% of respondents to our survey expect a decrease in the red tape burden, notwithstanding government promises to cut the cost to businesses of dealing with Whitehall by 25% by 2010.”

Recent figures revealed that £56bn of new regulatory burdens have been imposed on business since 1998. But Business Secretary John Hutton claims the government is on target to deliver its 25% reduction by 2010, with the south-west reportedly enjoying a £77m saving in the first year of the initiative.

He says the government has taken a number of positive steps, including halving the number of health and safety forms businesses have to fill in, speeding up the approval of planning consents, and removing the requirement for companies to hold an AGM or hire a company secretary.

“Despite these improvements, south-west businesses are still feeling the pinch of red tape,” says Mr Stonehouse. “There is clearly a large divide between the government’s view of deregulation and that of the people on the ground. The government needs to do a lot more to convince the region’s businesses that it really is acting in their best interest.”

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Notes to editors

For more information contact
Alan Stone – Marketing Manager
Tel: 01749 335007
E-mail: alan.stone@oldmillgroup.co.uk

About Old Mill Accountants and Financial Advisers
Old Mill accountants and financial advisers employ 140 staff in three West Country offices. The rural services teams are headed by Partners Mike Butler (Yeovil) and Ian Sharpe (Shepton Mallet). Looking after nearly 1,000 farmers they are one of the leading specialist farm accountants, and are happy to help with any financial and tax-related enquiries from the media.

Having worked in both large and small firms, Mark has broad experience in corporate finance. “I have been lucky to have a really varied career; literally working on everything from helping an individual to acquire their first ‘lifestyle’ business, through to working on the Stock Exchange listing of a FTSE100 company,” he said.

In leaving London, Mark went for a complete change by joining a regional firm, and had a real impact on the company, developing its corporate finance business in the smaller end of the market. With his move to the Old Mill Group, Mark says he is looking forward to working with some bigger clients once more. “Due to the nature of corporate finance, it is difficult to get in to the bigger deals if you are a small firm. Joining Old Mill gives me the opportunity to work on larger transactions again.”

Mark may be the new boy, but there is one person he knows well already; Director of Corporate Finance Guy Eggleton, who joined in August 2005, is a former colleague.

“I am looking forward to working with Guy again,” said Mark. “we used to do deals together when we were both at Ernst & Young. Guy’s emphasis is on lead advisory assignments, and I specialise in due diligence and transaction support work, so together we will focus on growing Old Mill’s Corporate Finance services.”

Mark lives in Okehampton with his wife and their young son.

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High resolution photograph of Mark Neath (181KB)

“The tax man is taking a more aggressive stance on agriculture, and this is one area where it is easy to fall foul of the rules,” says Mike Butler, partner at accountant Old Mill Rural Services. “People are diversifying and in particular developing buildings to let out either commercially or residentially. They assume that VAT is recoverable on the work done, but this often isn’t the case.”

When buildings are let out for residential use, VAT cannot be claimed on the initial, or maintenance, work, as tenants are not charged tax on the rent they pay. However, where buildings are let out for commercial use, VAT can be reclaimed on both capital and maintenance work, as long as the tenant is VAT registered and pays tax on their rent.

Landlords can also reclaim VAT on properties used by farm workers, as long as they are not paying a rent, says Mr Butler.

Fortunately, there is an allowance whereby landlords can recover up to £625/month in VAT, even if the property is one where the tax cannot normally be reclaimed. “This means that you can spend up to £42,000 a year and reclaim the VAT – saving yourself £7500,” says Mr Butler. “But if you spend a penny more you cannot claim any of the VAT back at all. The tax year for these purposes runs from April 1 to March 31, so be careful to spread any larger projects over two years.”

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Notes to editors

For more information contact
Alan Stone – Marketing Manager
Tel: 01749 335007
E-mail: alan.stone@oldmillgroup.co.uk

About Old Mill Rural Services
Old Mill accountants and financial advisers employ 140 staff in three West Country offices. The rural services teams are headed by Partners Mike Butler (Yeovil) and Ian Sharpe (Shepton Mallet). Looking after nearly 1,000 farmers they are one of the leading specialist farm accountants.

Old Mill, which provides accountancy and financial services, covers everything from Inheritance tax advice to audits for multi million pound West Country businesses and has seen a double digit growth in business across all areas.

Yet 12 months ago staff were stepping into the unknown after the company was bought out from Tenon – one of the UK’s top ten accountancy firms – by the management team.

But local focus and expertise has seen staff numbers and business rise to make Old Mill one of the largest accountants and independent financial services companies in the region.

The company, based in Park Road, Shepton Mallet, has proved that the West Country market town is an ideal platform to provide services to businesses who are now looking to local firms instead of big city companies.

And the firm, which also has offices in Yeovil and Exeter, has marked the anniversary with the arrival of a top tax partner from Ernst and Young – one of the four biggest firms in the country.

Bruce Lockhart joins the firm with 18 years experience with his former firm to enable Old Mill to provide the level of tax services usually only associated with national companies.

The business is also one of the first in the region to be awarded Chartered Financial Planner status by the Chartered Institute of Investment.

The title is the highest accolade a company can be awarded in this field and gives recognition for the high levels of technical expertise and huge amount of training that the company gives its staff..

Old Mill managing partner Jolyon Stonehouse said: “We are delighted the success of the last 12 months which is testament to the talented staff and the importance of local knowledge and experience.

“We are now one of the leading practices in the West Country with increasing staffing numbers and an excellent reaction from our clients.”

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The online survey asked a range of questions, designed to get a feel of how local business people are finding business prospects in comparison to last year and how they think key business issues will affect them during 2007. Jolyon Stonehouse, Chairman of the Old Mill, comments, “On the whole local organisations seem to be optimistic about the prospects for business. 59% of respondents think that 2007 is looking good and 30% okay. However, a rather concerning 11% commented that the prospects were bad.”

The survey also looked at how much use local businesses were making of their company websites. The most surprising result was that only 55% of those responding actually had a web site – perhaps somewhat unexpected as all respondents were obviously completing the survey online. Of the respondents with websites, 13% used it for active online ordering, 33% considered it to be an advertisement, whilst another 33% used it to generate leads and to allow people to register enquiries.

The survey then went on to ask if those with web sites were happy with the results they had seen from the web – 24% of organisations questioned admitted to finding the performance of their company website slightly disappointing, 71% of people felt it was matching their expectations whilst only 5% had found it was exceeding their expectations.

Overall, the results would indicate that many local businesses are not fully cashing in on the many IT and Marketing opportunities that the internet can now offer. The second issue of the Old Mill business survey attempts to ask questions to identify the reasons behind this surprising revelation and is now accessible to local businesses at www.oldmillgroup.co.uk. Once again Old Mill will be offering the prize of a case of wine to one lucky respondent as an incentive. Jolyon Stonehouse comments, “This is a great way for us to really understand local businesses and the issues that are currently affecting them. The more West Country business people who complete the online survey then the richer picture we will get of these issues.”

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Peter Haugh, Associate Director at Old Mill Accountants and Financial Advisers, presents Caroline Thorner of Jon Thorner Farm Shops with her prize for taking part in Old Mill’s first on-line survey. High resolution photograph (509KB)

Press release issued by Danielle Delaney at Publicity Matters. For more information please contact Danielle at danielle@publicitymatters.com or on (01275) 544116.

The latest to join this elite circle are two staff members from the city’s Old Mill accountants and financial advisers office who have been awarded the coveted ICAEW Corporate Finance qualification.

Guy Eggleton, a director in Old Mill’s Corporate Finance arm, and Mark Neath, a senior manager with the practice, are both based in the Old Mill office in Dix’s Field and have received the accolade in recognition of their excellent professional standards.

The prestigious qualification recognises expertise in a range of areas, from corporate acquisitions, disposals and mergers to management buy-ins and buy-outs.

Old Mill managing partner Jolyon Stonehouse said: “The qualification is an official endorsement of Guy and Mark’s high level of proficiency and conduct in the field of Corporate Finance. They have a wealth of experience and are perfectly positioned to advise business owner-managers who are looking to maximise and capitalise on their business assets.”

He added: “The Institute of Chartered Accountants (ICAEW) endorsement defines Guy and Mark as Corporate Finance specialists to clients all over the world and will definitely add weight to Old Mill’s growing corporate finance business.”

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P35s are the annual return employers have to submit each May with details of all money paid to employees. If they are not submitted on time there is a £100 fine for each month they are late. Last month approximately 150,000 £900 fines were issued to employers whom, it was said, were nine months late.

Closer examination has revealed that many of these fines were issued to people who had a nil return and did not realise they had to still complete the form. Others are to people who claim they did return one and haven’t been told otherwise. Others were to people who had neglected to complete the form – possibly not fully understanding this element of mass of bureaucracy which small businesses are subjected to.

Catherine Vickery, Tax Manager at Old Mill Accountancy in Yeovil comments, “Whatever the circumstance of each transgressor it does seem to be unreasonable not to let them know that they have done anything wrong for nine months until they have accumulated a £900 fine. It would appear that no reminders or previous notices had been sent. Depending on the circumstances, we are recommending that the majority of these penalties should be appealed against, and are expecting dramatic reductions in many cases.”

If you do not agree with the penalty you are entitled to appeal – however these appeals will have to be submitted by 23 April. If you know of anyone caught out please act fast. Catherine can be contacted on 01935 426181.

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With regard to farm houses, only the most genuine farming cases can carry any degree of certainty and for those employing contract farmers, even the most robust contract farming arrangement is likely to come under extreme scrutiny if a case finds itself before a tribunal of court. Land Agents in particular must prepare for this eventuality and advise accordingly. Land owners and farmers must be willing to accept the risk. Certainly any one acquiring land with a view to sheltering Inheritance Tax must proceed with extreme caution and only accept this relief as a result of well chosen tax planning and indeed then, only as a bonus.

Even the most genuine working farmer can expect I should anticipate up to 30% of the value of their working farm house to be taxed to Inheritance Tax following the implementation of the Antrobus II decision. The key point is that Agricultural Property Relief, the IHT relief generally available to agricultural assets only extends to the agricultural value of that asset. Agricultural value is broadly defined as the value of an asset as if it could only be used for farming purposes and carries such a onerous restricted covenant. In the Antrobus II decision, the excess value of the farm house over and above its’ agricultural value amounted to 30% and the estate was taxed on this surplus.

Perhaps more interestingly, is the potential application of the Antrobus II decision to farm land itself. With the comment coming from many farmers that they cannot afford to buy land now because of the amenity premium, it must be a risk for those acquiring land at such a premium that valuation of farm land on death may well contain a significant premium over and above its’ agricultural value. As such, this excess will not be covered by Agricultural Property Relief and therefore potentially subject to Inheritance Tax.

The more that it is written about high land value and the more land is marketed and sold for its’ amenity value rather than its’ agricultural value, the greater the risk that the Capital Tax Office will begin to identify this as an area for rich pickings.

Don’t be fooled if you think H M Revenue & Customs will show leniency in these matters. Recent Inheritance Tax cases and indeed the Revenue’s approach to VAT and in particular shooting, is a clear demonstration that duty recovery is their primary aim and that this will be achieved by whatever means are available to the tax authorities. The days of doing nothing and hoping things will be ok are long gone and perhaps now, more than ever is a time when we can truly say Inheritance Tax is payable by the ill advised. We strongly advise all farming families to seek advice and protect your valuable family farming assets.

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Inheritance tax also leads to some gross injustices. Daughters who have been carers for an elderly parent for many years finding they have to sell the house they have lived in for many years. Farmers have been traditionally protected to enable them to pass their farms to their children but now even this is under threat.

At Old Mill accountants and financial advisers we have professional staff both on the tax and on the financial services side who can offer personal advice whatever your circumstances. If you have concerns around Inheritance tax ring Catherine Vickery on 01935 709381 to see if Old Mill can help you.

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Mark, who lives near Tiverton with his wife and two young children, began his career with HM Customs & Excise and brings with him over 15 years consultancy experience, including 13 years with Ernst and Young.

Mark commented, “Old Mill is the new name on the West Country business scene. It’s very exciting to be joining the fast growing Exeter office. I am particularly looking forward to helping Old Mill’s clients and maintaining the relationships I have built over many years of practice within the South West business community.”

Jolyon Stonehouse, Chairman of the Old Mill, stated, “We are delighted that Mark has joined the firm. VAT issues crop up from time to time in most businesses. Specialist advice saves time and money. Mark has a wealth of experience and is already proving to be a valuable asset to the Old Mill team.”

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High resolution photograph of Mark Peters (155KB)

Press release issued by Danielle Delaney at Publicity Matters. For more information please contact Danielle at danielle@publicitymatters.com or on (01275) 544116.

The 31st January is the last day for filing 2005/06 Personal and Trust Tax Returns and, if you haven’t already; you should now be looking at completing your Tax Return before it’s too late. You will need details of all income earned during the year, such as P60s and P11Ds from any employment, income and expenditure for any trades or properties rented out, certificates of bank interest and dividend vouchers etc, and also details of any assets sold during the year that may be liable to Capital Gains Tax. If you find out now that you are missing anything you may be able to request it in time to complete your Tax Return before the deadline, but if you leave it until the last minute you may find you can’t get all the information you need.

A tax return can become complex and many people end up paying more tax through self assessment than they need to. People may initially be reluctant to spend money using a professional accountant however it has often been shown to be a wise investment. The Tax Team at Old Mill are happy to assist with any tax issues you may have. Old Mill can also advise on appropriate tax reliefs that you may be eligible for, helping you to save on tax.

Catherine Vickery, Taxation Manager at Old Mill, comments “We are happy to assist you, but please remember that we can’t perform miracles and complete Tax Returns if we don’t have all the information! We can of course help by advising you exactly what is needed, but with the deadline looming we would be keen to hear from you sooner rather than later.”

Taxpayers not filing their Tax Return by 31st January will be liable for a £100 penalty if they have an outstanding tax liability. If you are unable to file your Tax Return by the deadline you can avoid paying the £100 penalty by estimating and paying your tax liability for the year. This is because the penalty is the lower of £100 and any outstanding tax as at 31st January. Catherine Vickery suggests, “If you are using estimated figures do err on the side of caution, as an underpayment may still mean a penalty is due. Any overpayments can be reclaimed at a later date when the Tax Return has been filed and processed.”

For further information or assistance with your 2005/06 Tax returns please visit www.oldmillgroup.co.uk

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High resolution photograph of Catherine Vickery (354KB)

Press release issued by Danielle Delaney at Publicity Matters. For more information please contact Danielle at danielle@publicitymatters.com or on (01275) 544116.

For many farmers the fear of paying tax can often result in the unnecessary replacement of farm machinery. In certain circumstances this may be appropriate; however there are other more useful ways of mitigating tax without consuming precious capital. For example, taking advantage of revised pension rules, particularly in terms of the new regulations allowing flexibility with Self Investment Pension Plans and higher contribution limits. Business structure considerations in terms reviewing partnerships and looking to operate as limited companies as part of the overall operation, are all factors to be considered. Farmers Averaging can also provide some opportunities, as can the timing of income recognition in terms of Single Farm Payment and the timing of crop sales.

Mike Butler of Old Mill warns, “It is possible that higher commodity prices will last and there is also the potential for reasonable contracting profit shares, both of which will make tax planning vital to all arable farmers. It is essential that tax planning takes place during, and not after the accounting year, as many mitigation decisions will need to be undertaken before the year ends.”

With most arable farms having now completed harvest, a firm prediction of profits can be obtained. Any work on autumn plantings will only form part of a valuation for the following year and therefore will not affect the current year’s profits. In order to avoid any unwelcome surprises in the future, Mike Butler suggests that all arable farmers work with their accountant to asses their level of profitability and take action now.

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Press release issued by Danielle Delaney at Publicity Matters. For more information please contact Danielle at danielle@publicitymatters.com or on (01275) 544116.

As the McKenna case was heard at a special Commissioners Hearing it does not have legal precedence. It does however, represent clear persuasive evidence on the current interpretation of Inheritance Tax legislation, and in particular, the issue of agricultural property and agricultural occupancy. Unless the McKenna case is appealed against in the High Court, which Antrobus II was not, we will still have to wait for a test case to be brought forward. This would then provide the necessary legal precedence on which the best advice can be based. For the time being we will wait to see whether the Executors of the McKenna Estate make the decision to appeal.

One of the key issues in the McKenna case revolved around agricultural occupancy of a farmhouse and circumstances where a contract farming arrangement was in place. It was held that the house itself was of a character inappropriate to the holding, and it was also commented by the special Commissioners that the presence of a contract farming arrangement and the use of agents; took away the McKenna’s day to day decisions in terms of the operation of the farming business. It was noted that the scenario would have been persuasive in restricting the relief purely on those circumstances alone.

The result of the McKenna case seems to be another turn of the screw against land owners and highlights that the necessity for professional bodies and supporters of the rural sector to consider carefully how they will respond in order to protect their landowners’ interests. One thing certainly seems to be clear with the current legislation and its interpretation; high value farmhouses or farms using contract farming arrangements will need to reconsider their position carefully in light of recent developments.

Mike Butler, Partner of specialist farm accountants Old Mill Rural Services, warns “There is no safe option that guarantees IHT relief in the current Capital Tax climate. It’s now more important than ever that landowners do all they can to check their positions in terms of the arrangements they adopt and the evidence they keep regarding their involvement in farming activity.”

The final message relevant to Land Agents who are asked to dispose of rural property by Executors is that they must be aware that the character appropriate test can be influenced by the way in which the property is marketed. This was certainly the situation in the McKenna case where the property was ultimately sold on the basis of a magnificent house with land, rather than a farm to include a farmhouse. While it is understandable that Executors may wish to seek maximum value from assets it is critical that they come to the realisation that such an action may come with a 40% tax penalty!

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Paula joined the company in 1997, and is one of the three partners from the financial services side of the business. A leading Independent Financial Adviser, Paula is an expert on investments, pensions and inheritance tax.

Simon Cole, managing partner of Old Mill Financial Services LLP comments, “Having Paula on board is excellent news. She has long been one of our most respected advisers and now she can bring her expertise to the benefit of the business as a whole.”

Paula is Yeovil through and through. She was born and educated in the town and now, as a mother of three young children, Paula still lives in the town and is excited about the challenges ahead for the new company.

“Our new business is really exciting,” she said. “We have bought together quality accounting, tax and financial services to provide an integrated service at a level that few if any can match. We are offering our clients professional top quality advice to be trusted around their financial affairs. Our aim is financial security for clients, their businesses and their families.”

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High resolution photograph of Paula Hodge (267KB)

“Farmers working together can deliver some truly impressive results,” says Mike Butler, Rural Services partner at The Old Mill Group. “Co-operation has never been such a significant factor in terms of gaining financial security, and in terms of moral support. Farming can be really tough, so it is time for farmers to break down barriers and work together rather than compete, or at worst, attempt to out do each other.”

Co-operation is definitely beginning to take effect, argues Old Mill, and the firm is trying to encourage it as much as possible, but on the other hand realises it is foolish to think that every farm has the opportunity to work with another.

“But, for those that know they are over-staffed, those that need an extra helping hand but can’t afford an extra member of staff or for those looking to rationalise their equipment, co-operation could be the ideal opportunity,” says Mr Butler.

“Dairy farmers can share costs, and we have come across farmers sharing mixer wagons and labour but still getting the job done perfectly adequately. The same applies with dirty water systems such as umbilicals and muck handling equipment.”

Old Mill argues that those farmers who don’t take advantage of opportunities to approve efficiency may not survive the next five years. “We have seen examples of it working and in many cases we have set up those improvements ourselves,” says Mr Butler. “If this is something you are interested in looking into, then talk to us about it, we are here to help.”

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Employing more than 130 staff from offices in Shepton Mallet, Yeovil and Exeter, the Old Mill Group will become one of the West Country’s most significant accountants and financial advisers, with an annual turnover of £7 million. The new firm will be run as LLPs (Limited Liability Partnerships), by Jolyon Stonehouse, Mike Butler, Simon Cole, Kevin Whitmarsh, Ian Sharpe, Tom Baines, Paul Treby, John Jackson and Paula Hodge.

The Old Mill Group will offer an integrated service, looking after the financial, tax and accountancy needs of its clients through its two operating businesses – Old Mill Accountancy LLP, which will also look after rural services, and Old Mill Financial Services LLP.

“Prior to our joining Tenon five years ago – when we operated as Berkeley Jackson accountants and Old Mill Financial Services – we evolved a close relationship between the two sides of the business,” explains Jolyon Stonehouse, Chairman of the new group. “This gives us an integrated offering looking after individuals, their families and their businesses.

“Over the past 55 years, we have built up an extremely loyal client base of 2,000 West Country businesses including many farming and rurally based. Although we have enjoyed five successful years as part of Tenon, with whom we will maintain strong links, some of the younger partners always felt that the rural location of the business meant we would be unable to maximise the benefit of that association.”

Simon Cole, Managing Partner of Old Mill Financial Services adds, “We feel that our distinct West Country offering of integrated accountancy and financial services mean we have a different offering from any other accountant in the region. With tax and Inheritance Tax planning becoming an increasing priority, we feel that the time is right for us to move our distinctive offering forward.”

The buy-out will not affect any local staff – all 130 jobs will be safe – and further recruitment is anticipated. In addition, 10 people will remain with Tenon employed in the Tenon Group IT headquarters in Shepton Mallet.

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