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.”

Mr Hill, who enjoyed considerable success in the showing classes with his Quaish herd of Limousin cattle, won the award for best presentation of cattle in the lines.

Ian Sharpe, partner at Old Mill’s Shepton Mallet office, said he was delighted to continue the firm’s tradition of sponsoring the Cattle Presentation Award. “We think it is important that the cattle in the lines are made accessible and are well presented to the public,” he said.

“Many people come to the Bath & West Show to look at the wonderful animals which are on display, and it’s important to maintain that link between farming and the general public.

“Nick Hill presented his Limousins beautifully, with great care and attention to detail, and it is with great pleasure that I present him with this award.”

Old Mill Rural Services was also asked to present the Nelson Burden Award for outstanding contribution to the Show’s beef cattle section. This year it was won by Geoffrey and Doreen Fuller from Minehead, Somerset.

Ian Sharpe & Nick Hill - High resolution photograph (803KB)

Nelson Burden Award - High resolution photograph (787KB)

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.

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.

Faced with poor commodity prices over the past decade, many farmers have looked at ways to maximise profitability through exploiting non-core streams of income, says Ian Sharpe, partner at accountant Old Mill Rural Services.

“This is perhaps most evident in the family farm scenario where some family members now earn the bulk of their income from employment away from the farming business.”

In a sample of 150 of Old Mill’s farming clients, 56% have significant other enterprises outside of traditional farming activity, with the most common being income from property interests. “Some 37% of farms now have an element of property management, varying from residential lettings to bed and breakfast and office units,” says Mr Sharpe.

The next most popular form of alternative income is off-farm contracting, at 11%. Added value enterprises make up 3% of diversifications, with commercial shooting coming in at 2%.

“In addition, 15% of farms have one of a number of other diversification projects ranging from golf courses to horse livery and farm shops,” he adds. Many also have more than one diversification falling into the above categories.

“But it is important to note that these figures only relate to farm diversification, not to non-farming jobs undertaken by family members. Off-farm employment now forms a significant part of modern farming family life.”

The impact such diversification has on the bottom line ranges from a few thousand pounds to over a million -in some cases considerably overtaking the core farm activity, says Mr Sharpe.

“Some farmers can no longer be considered food producers - they are multi-skilled businessmen and women who have made best use of their resources to not only survive the hard times but thrive and grow their business as each year passes.”

Although many commodity prices are returning to profitable levels, Mr Sharpe expects a lot of farmers will continue to diversify. But it is important that they examine any major business change carefully, not least because of the practicalities of running a new venture alongside the core farming enterprises.

There are also important Capital Gains and Inheritance Tax implications, and advice in these, and other specialist areas, such as planning and employment, is crucial, he adds. “Careful preparation is essential to put a new business on a sound footing before trading commences, and to reduce the chance of unforeseen problems down the line.”

The new Enhanced Capital Allowances (ECA) offer energy saving or water conserving plant and equipment a 100% write off in its first year, says accountant Old Mill Rural Services. “This could be a major boost for anyone considering putting in new dairy infrastructure to meet tighter regulations under Nitrate Vulnerable Zone proposals, for example,” says Mike Butler, director of rural services.

Eligible water conserving options include water efficient taps, showers and toilets, slurry separators, meters, and rainwater harvesting equipment. Energy saving lighting, refrigeration equipment, boilers and compressors also qualify for the new allowance.

“With improved profits in arable and dairy sectors, as well as tightening environmental legislation, many farmers are planning significant reinvestment in their business over the coming years,” says Mr Butler. “This new allowance could provide them with a major tax saving for adopting environmentally-friendly practices. Not only will they have lower tax bills, they will enjoy lower utility bills as well.”

Many dairy farmers are considering installing rainwater harvesting technology on new buildings, and it is possible that a significant proportion of the building itself will qualify for the 100% first-year allowance.

Currently, agricultural buildings qualify for a 4% annual allowance, but this is being phased out from April. Capital allowances on plant and equipment will offer a 100% write in the first year from April, up to a maximum of £50,000, followed by a 20% annual write-off thereafter. “This is great news for anyone buying new plant and equipment,” says Mr Butler.

“But someone buying a new tractor can quickly reach the £50,000 limit. Fortunately, the ECA will run alongside the normal Capital Allowance regime, and is not capped, so farmers buying a new tractor and investing in environmentally-friendly equipment will benefit from full relief on both purchases.”

This is particularly welcome, given the significant increase in farmers’ likely tax liabilities due to higher farm profits and the phase-out of Agricultural Building Allowances, says Mr Butler.

Anyone looking to erect a tax-efficient agricultural building and reduce their income tax bill should consider using a Self-Invested Personal Pension (SIPP), he adds.

“Take, for example, a farming partnership with £120,000 profit this year, which wants to erect a £120,000 new building. By paying £60,000 into a SIPP before April 5, and another £60,000 after April 6, the partnership will save £24,000 in tax for each tax year. They can then invest that money into the new building, getting 100% tax relief, and reducing the actual cost of the build to just £72,000.”

Fore more details on how to make the most of SIPPs or the new Enhanced Capital Allowances, contact Mike Butler on 01935 709301.

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 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.

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.”

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.

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.

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.

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.”

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 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.

Recent changes to Inheritance Tax (IHT) rules, announced in Alistair Darling’s Pre-Budget Statement, suggested a move to more straightforward tax planning. His guarantee of the full use of IHT nil rate bands for each partner means that, from October 9, 2007, a couple is able to pass on £600,000 of taxable assets tax-free.

But married couples and civil partners must not rely on these changes when planning to pass on their estate, warns Chartered Financial Planner Julia Banwell. “Quite a few of our clients think they can now leave everything to the surviving spouse and ‘save’ their nil rate band for their partner,” she says. “But with legislation and government policies likely to change many times over the next 5-50 years it would be imprudent to rely on these new proposals in the long term.”

Rather than taking any chances with IHT, couples should consult their financial advisers and solicitor jointly, to draft a practical will to protect their assets for the future. “Many advisers underestimate the importance that flexible and well drafted trusts can play in a family’s longer term strategic tax and financial planning,” says Julia. “The absence of such planning can be financially disastrous for all concerned.”

For example, using a Nil Rate Band Discretionary Trust can protect assets in the event of the survivor requiring long term nursing care. They can also ensure that one’s estate is passed onto blood relatives, should the surviving spouse remarry, as well as protect against future divorce settlements among the inheritors.

“The increasing complexity of modern living means that some of our clients are wanting to look at ways of preserving assets they have worked hard to build up,” explains Julia Banwell.

Aside of these issues, couples must also consider the impact of potential investment growth and future indexing of the nil rate band level on their possible tax liability. “It is likely that your investments will grow in value more quickly than the nil rate band, meaning an estate which currently slips under the nil rate level could be liable to IHT in future years – something which can be avoided by putting it into a Discretionary Trust.”

In all cases the surviving spouse would be a discretionary beneficiary of the Trust, so they would not be put at financial disadvantage, Discretionary Trusts still have a large part to play in providing your family with maximum flexibility, regardless of current government policies. It is far better to base your financial planning on certainty within current rules, rather than hoping they will stay the same.

Ends.

Notes to editors

For more information contact
Julia Banwell - Chartered Financial Planner
Tel: 01749 335048
E-mail: julia.banwell@oldmillgroup.co.uk
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.

At a business seminar in Devon last week land agent Carver Knowles and accountant Old Mill Rural Services joined forces to guide forward-thinking farmers through the threats and opportunities posed by current tax and planning legislation.

“Twelve months ago we were in a very different climate,” said Mark Neason, partner at Carver Knowles. Then, the majority of projects concentrated on developing redundant buildings for tourism or commercial use. “But within the past six months we have seen more people looking to put up new agricultural buildings.”

Stronger milk and grain prices, along with onerous slurry storage proposals, were contributing to this new wave of investment, but farmers had to consider potential future uses of buildings as well as immediate need, he warned. “It’s all about adding value to the farm and your business.”

Farmers should make the most of permitted agricultural planning rights, and seek to erect buildings on off-lying or un-serviced land. Not only would these buildings address immediate needs, they would add significant capital value to the land and offer potential development opportunities in the future, said Mr Neason.

And by improving the build specification and location of new agricultural buildings, farmers could open up commercial opportunities in future years, he added.

Accountant Neil Cox said there were many ways in which farmers could constructively utilise tax and pension opportunities when planning new buildings. These included the use of a corporate partner and a Self-Invested Pension Plan to minimise tax paid and reduce build costs through pension allowances – resulting in sizeable capital benefits.

“Agriculture is moving into a period where new developments are really on the cards,” he said. “By working with professionals farmers can benefit from a land agent’s ideas and experience to get the best from the planning authority, while using an accountant to exploit tax and pension regulations to make their project both viable and sustainable.”

Old Mill Rural Services is hosting a number of business seminars in partnership with Carver Knowles, covering topics such as tax efficient investment, proposed changes to the tax regime, obtaining planning permission and maximising capital value within a business. For more information or to book a place at Taunton or Yeovil on December 5, or Shepton Mallet on December 6, please call 01749 344986.

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 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, and are happy to help with any financial and tax-related enquiries from the media.

For many, the highlight of the Statement was Mr Darling’s guarantee of the full use of the Inheritance Tax nil rate bands for both spouses, meaning a couple’s taxable assets of up to £600,000 will escape tax.

“However, this will actually have very little impact on the well-advised, as they would already have been achieving this through carefully drafted wills,” says Mike Butler, Partner with the specialist Rural Team.

More important to rural businesses are the planned changes to Capital Gains Tax (CGT) rules. These spell the end of Indexation, which gave an allowance for inflation between 1982 and 1998, and meant that if an asset had only increased in line with inflation then no CGT was payable. The benefit of this will be removed from April 2008.

Taper Relief is also to be abolished. Since 1998 Taper Relief has given a maximum tax rate of 10% upon the disposal of business assets, and even less in many cases. “Contrast this with the rate of tax suffered on the disposal of non-business assets of at least 24%,” says Mr Butler.

“With the planned introduction of a flat rate of CGT of 18% on the disposal of both business and non-business assets, it is clear who will be the winners and losers. Unfortunately those running businesses will be worst affected by the changes, which are due to be introduced next April,” he adds.

“Anyone seeking to gift or sell business assets should consider doing so before April 2008, to make the most of Indexation and Taper Relief benefits, and to avoid the increased CGT levy. This will particularly apply to disposals of old barns and farm land, especially if they have development potential.”

However, those looking to sell or gift non-business assets, including let properties and investments, should probably wait until after 6 April 2008 for maximum benefit.

Gordon Brown had already introduced other unpleasant surprises in his 2007 Budget, in the form of increases in the small companies’ Corporation Tax rate, from 19% to 22% by 2009, says Mr Butler.

“In the past, transferring a business to a limited company has proven extremely tax efficient, with lower tax rates on profits, and business asset Taper Relief from CGT on shares when winding up the business. The combination of modest rises in the small companies’ Corporation Tax rate and now the rise in CGT rates means that the decision to incorporate for fiscal savings is far less clear.”

Catherine Vickery, Old Mill’s Agricultural Tax Specialist, is working with the firm’s tax planning team to consider ways to utilise Indexation and Taper Relief before they disappear, adds Mr Butler. “But it is vital that anyone with assets sat at a gain considers their position, to make the most of this window of opportunity.”

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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, 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.

To qualify for the status the company must ensure at least half of their executive directors and partners each have Chartered Financial Planner status as individuals and at least 90 per cent of their customer facing staff have specialist financial services training.

Partner in charge Simon Cole said: “This status is recognition of our long term commitment to invest in training our staff.

“We believe that all our staff should receive training so that we can offer a genuinely high standard of service to all our clients and so that our staff are able to progress and develop.

“Six of our consultants have achieved Chartered Financial Planning status as individuals and we have now shown that the ethos of the whole firm fits with the highest aspirations.”

Old Mill has offices in Exeter, Shepton Mallet and Yeovil. Services offered include advice on investments, pensions, mortgages and insurance. Due to considerable expansion over the past two years the company is in the middle of a recruitment campaign which will the number of consultants.

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In recent years farmers have been able to write off 50% of the cost of machinery and plant in the first year, with a 25% allowance on the residue of equipment in succeeding years.

But from April 2008 the 50% allowance is likely be replaced with a 100% write off for qualifying plant and equipment purchases, up to £50,000. While this may sound attractive, any farmer spending more than £50,000 in any one year will not be able to claim any first year allowance whatsoever.

“What is worse, Gordon Brown has proposed to reduce the residual allowance from the 25% currently enjoyed to 20%,” says partner Mike Butler. “Furthermore, it is identified that fixed plant and equipment within buildings may not qualify for the normal capital allowances but will only attract a much lower 10% rate.

“Many farmers rely upon the claim for tax relief on plant and machinery to mitigate their tax liabilities,” he adds. “With increased mechanisation being used to compensate for lower labour levels, the recent run of first year allowances have made buying plant and machinery a relatively tax efficient option. But with the first year allowance now only available for the current year, this may be your last chance to enjoy those relatively useful tax breaks before they are taken away.”

At the same time, while the government is easing the Corporation Tax burden on large companies from 30% to 28%, it is racking it up from 19% to 22% for smaller businesses over the next two years.

This means that any companies with profits of up to £300,000 will not only be able to claim fewer tax allowance on purchases of plant and machinery, they will also be paying a higher rate of tax on their profits.

“While it may be cynical to suggest that only the largest businesses based in the City have the Chancellor’s ear, it seems clear that farmers and agricultural contractors are seeing their tax breaks being steadily eroded,” says Mr Butler. “And this all comes at a time when agricultural businesses desperately need to invest to prepare for a future with lower, decoupled, support payments.”

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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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