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.”

Many producers use self-employed contractors for milking or other services, as it can be cheaper than employing full-time or part-time staff. However, by doing so, they could lose agricultural tax relief on any properties occupied by the contractors, as well as leaving themselves open to paying National Insurance and Income Tax arrears.

“Very often a herdsman who considers himself to be self-employed is actually employed in the eyes of the law,” says Mike Butler, Partner at Old Mill Rural Services. “An individual’s view of employment status is irrelevant – it is a point of fact to be decided by the correct legal interpretation of the facts of the case. And, if a self-employed contractor is in reality found to have been employed, and walks away without paying the duty they owe, the employer will be liable to pay that missing tax and National Insurance.”

Points to consider include whether the contractor shares some of the financial risks associated with the work, what proportion of income they derive from a single client, and whether they personally have to carry out the tasks, or can engage a sub-contractor, for example.

But it is not just Income Tax and National Insurance that the farmer could be liable for. If the contractor is truly self-employed, it has significant implications for relief from Inheritance Tax and Capital Gains Tax. “A farmer who provides a self-employed contractor with a farm cottage to live in could find that the dwelling no longer qualifies for Agricultural Property Relief from Inheritance Tax. Equally, the property could lose its status as a business asset for Entrepreneur’s Relief or Rollover Relief for Capital Gains Tax purposes,” says Mr Butler.

“In those cases the farmer may well end up paying £10,000s in tax, merely to have the comfort of a slightly cheaper self-employed herdsman. Cutting corners is the worst possible option when it comes to tax planning. It is important to get a full and thorough review of your circumstances to ensure that tax liabilities are kept to a minimum.”

Manufacturers who use alcohol in their products, such as brandy in Christmas puddings or cider in sausages, can claim back the excise duty through the little-known Alcoholic Ingredients Relief. “Tax makes up a huge percentage of alcohol prices, so manufacturers who use duty-paid alcohol in their ingredients could save a significant amount,” says associate director Mark Peters.

Processors must enter their claims directly to HM Revenue & Customs within a month of the alcohol purchase, and usually for a three-month production period. Separate claims are required for each manufacturing premises, and must amount to at least £250. “Large users with Excise Duty bills exceeding £5,000 a year can apply for approval to receive alcohol ‘duty unpaid’ for food manufacturing purposes, which negates the need for them to make regular repayment claims.”

HMRC requires claimants to adhere to certain control procedures, and further conditions apply, particularly in relation to the type of food products that are eligible for relief, he adds.

Another often overlooked relief concerns excise duty paid on heavy oil used by growers of horticultural produce. “Rebates are available for duty paid on fuel oil used to heat buildings, structures or the ground to help grow produce like fruit, vegetables, flowers and herbs,” says Mr Peters. “Seeds, trees and shrubs are also covered, although hops are not.” Relief is also available for fuel oil used to sterilise the ground where such crops will be grown.

Claims can be made for sums greater than £50, for any period between two months and three years, but must be submitted to HMRC within three months of the date to which the claim relates. “Again, further conditions and controls apply, so it is important to ascertain whether your business is eligible. However, in both these scenarios it is possible to reclaim a substantial amount of tax back, which will offer a healthy boost to profits.”

Although incomes have fallen this year, many farmers are still paying tax on forecast higher profits, following last year’s improved trading conditions. “While paying tax is often a sign of a profitable enterprise, paying too much tax starves businesses of cash flow, often at times when cash is particularly tight,” says Partner Mike Butler.

“Many farmers have had a reasonably profitable couple of years, leading to heavier tax liabilities. Hopefully, they will have taken advantage of tax planning opportunities like farmers’ averaging, use of pensions or perhaps creating limited companies to reduce that tax burden. Even so, many will still be paying tax on future profits on the assumption that the better times are continuing. Regretfully, that assumption is unlikely to be correct.

“Higher input costs and falling commodity prices mean that profits are likely to suffer for 2009/10 and possibly beyond. With most of the tax system based upon making advance payments on account, those farmers whose profits are falling should reduce their payments on account now.”

HM Revenue & Customs does not usually pay interest on overpayments of tax – and what little interest may be paid will generally come some eight months or more after the end of the tax year. “It is therefore far more sensible to act now to ensure you are paying the correct amount of tax, instead of waiting until you have prepared the year’s accounts, only to find that you need not have paid tax in the first place,” says Mr Butler.

“There are of course other opportunities to mitigate tax if you are facing a profitable year, such as maximising tax relief on plant, equipment and building costs. The key is to have a strong understanding of your business’s position as you go along, and work closely with your accountant to identify the best way forward, before the end of the tax year.”

For more information contact Mike Butler at Old Mill on 01935 709321.

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

“Through his pre-budget report, the chancellor may well have inadvertently encouraged many small businesses and self employed people to consider becoming limited companies in order to enjoy the ‘tax breaks’ such a change would offer,” explains Old Mill’s tax planning specialist Catherine Vickery.

The two announcements within the pre-budget that may encourage further incorporation among small business, says Old Mill, are the Chancellor’s decision to delay the 1% rise in Corporation Tax  – the tax paid by companies – for another year and his decision to increase the rate of National Insurance by 1% from April 2011.

Currently, companies making profits of less than £300,000 pay corporation tax at 21% while a self employed individual making profits more than around £44,000 has to pay 40% tax whilst if profit is in excess of £150,000 from 6 April 2010 they will have to pay the new higher rate tax of 50%.

“If an individual earning £150,000 or more from a self-employed business decided instead to become a limited company, they could pay themselves a salary and ensure they stay within the basic rate of tax and if they need more income, they can pay themselves in dividends, saving themselves a considerable amount of tax,” explains Catherine.

“And, the 1% rise in the rate of National Insurance from April 2011 also makes incorporation a more attractive proposition, because National Insurance is only payable on salary and not total income,” continues Catherine.

“Therefore, if a small business or self employed business was to become a limited company, they would only have to pay national insurance on the salary they paid to themselves and not the total profit earned,” she said.

If you run a small business or are self employed and are considering incorporation, contact Catherine.Vickery@oldmillgroup.co.uk or call 01749 343366.

“The Chancellor’s Pre-Budget Report was somewhat surprising in its lack of revenue-raising increases, that many had been expecting to fill the government’s large deficit,” says Catherine Vickery, rural tax specialist at Old Mill. “However, there have been some changes that will impact on farming businesses, particularly the 1% rise in National Insurance contributions for both self-employed and employed workers from April 2011.”

Alistair Darling also announced a freezing of the Corporation Tax rate, confounding expectations of an increase. “These two measures will surely push more farmers into incorporating their businesses, to draw profits via dividends, which are not subject to National Insurance contributions,” says Mrs Vickery.

Other changes announced in the Pre-Budget Report included the well-publicised abolition of Furnished Holiday Let allowances, which will render holiday properties liable to Capital Gains Tax and Income Tax in the same way as other rental properties. “However, early indications are that some of the tax benefits accrued before 6 April 2010 will not be lost overnight, which will be a relief to holiday cottage owners.”

Mr Darling also froze the Inheritance Tax nil rate band at £325,000, rather than increasing it to the proposed £350,000. “If your assets exceed this amount then you should be considering how to minimise your potential Inheritance Tax liability,” says Mrs Vickery. “In all these cases it is a good idea to seek professional advice, to keep as much of your hard-earned cash where it belongs.”

Editor’s Notes

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 190 staff in four West Country offices. The Rural Services teams are headed by Mike Butler (Yeovil), Ian Sharpe (Shepton Mallet), Andrew Vickery (Exeter) and Paul Neate (Devizes). Looking after over 1,200 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.

Sponsored by Old Mill Rural Services and Frome Animal Products, the haltered cattle class attracted a spectacular entry of high quality stock, which were judged by Rob Rattray. Claiming the championship and £1000 prize money was Michael Kingston’s 18-month old Limousin cross heifer, Chequita. “I am thrilled to present this prestigious prize to Mr Kingston, from Catcott, Somerset, at what has been a superb first Winter Fair,” said Old Mill’s Neil Cox.

“Sedgemoor Auction Centre is becoming one of the country’s leading livestock markets, and we are pleased to be supporting such an important lynchpin for the rural community. I am sure this event will become an annual highlight of the farming calendar.”

Chequita went on to sell for 370p/kg (£2147/head), with Mrs DA Williams’ 17-month old Limousin steer taking the reserve champion spot, and selling for 255p/kg (£1692/head).

“The final championship line up of nine class winners was as strong a show of cattle as will be seen anywhere in England this year,” said auctioneer Jeremy Bell. “Congratulations to all exhibitors for creating such a spectacular show of cattle and many thanks to our commercial vendors for bringing forward such a quality selection of cattle to follow.”

Caption: Neil Cox from Old Mill Rural Services (left) presents the £1000 prize to the Champion Haltered Animal at Sedgemoor Auction Centre’s South West Winter Fair.  He is pictured along with the winning animal, a Limousin Cross heifer called “Chequita”, owner Michael Kingston from Catcott and judge Rob Rattray (far right).

High resolution photograph (914KB)

Editor’s Notes

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 190 staff in four West Country offices. The Rural Services teams are headed by Mike Butler (Yeovil & Devizes) and supported by Ian Sharpe (Shepton Mallet), Andrew Vickery (Exeter) and Paul Neate (Devizes). Looking after over 1,200 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.

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

Following a pair of court cases involving Mars and William Grant & Sons Distillers, HM Revenue & Customs has changed its stance over the treatment of depreciation for tax purposes within closing stock valuations.  Businesses are required to include depreciation within a closing stock valuation such that the cost of production is accurately reflected.  Although depreciation is not an allowable expense, HM Revenue & Customs would not allow an adjustment to reflect this. However there is now an opportunity to do so, and reduce taxable profits accordingly, says rural tax specialist Catherine Vickery.

“Most farmers and food businesses will be aware that lowering stock values reduces profits, and therefore cuts tax liabilities. Many have a significant amount of equipment, which is depreciating each year, and carry considerable stock levels. Offsetting a percentage of this depreciation against stock values can therefore have a massive influence on business profitability, particularly in the first year that the adjustment is made.”

For example, a typical arable farm carrying over a quarter of the year’s grain, can now offset 25% of its depreciation against the value of those stocks as part of its cost of production. That could cut the value of the stock by, say £25,000, which, at a marginal tax rate of 30%, would equate to a tax reduction of about £7,500, says Mrs Vickery.

“Businesses that carry larger stocks will be able to claim an even greater depreciation element. Some will be able to save vast amounts of tax – big farmhouse cheese producers, for example, could be looking at adjustments measuring in £100,000’s.”

All businesses should consider their stock valuation and depreciation calculation, with the help of their advisers, she adds. “HMRC is actively encouraging people to deal with this matter in the current financial year – those who have already finalised their position should look at it again with a view to obtaining a tax refund.

“This is a superb opportunity for anyone who relies on equipment as part of their business and carries stock or crops over at the end of their accounting year to slash their tax liability. It would be madness not to do so.”

For more information contact Catherine Vickery at Old Mill on 01935 426181.

Usually farm cottages occupied by farm employees qualify for 100% IHT relief, says Mike Butler, Head of Rural Services at accountant Old Mill. But from a tax perspective there is a huge difference between farm workers engaged through the PAYE system and those who are registered as self-employed.

“Some farmers may find it attractive to save on National Insurance and other expenses by using self-employed labourers. But if they provide accommodation for their workers, they must be aware of the impact such an arrangement could have on the taxation of farm cottages, potentially costing the business £100,000s.”

For example, a farm cottage worth £275,000, which is occupied by a farm employee, would qualify for 100% IHT relief. But if it housed a self-employed worker it would become liable to IHT charges of 40%, raising a tax bill of £110,000.

“When considering whether a property is subject to Inheritance Tax, one must at least look at its use and qualifying occupation periods for two years prior to the date of death,” says Mr Butler. “It is essential that farmers are aware of this potential pitfall, and plan now to avoid hefty tax liabilities in the future.”

It recently benchmarked South West dairy clients with a year end of March 2009, and found that average net profits rose by only 1%, excluding the Single Farm Payment, to £42,550 per herd. Even with the single payment included, net profit only increased by 3%, with a sharp increase in costs eroding better returns.

“Milk yields per cow actually fell by 4%, to 6,835 litres – probably on the back of poorer quality forage last winter,” said the firm’s Andrew Vickery. “However, this was more than compensated for by a rise in the average milk price, from 23.5p/litre in 2007/08 to 27.61p/litre in 2008/09, as well as a slight rise in herd size.”

Overall, the money generated by milk sales increased by an average of 13%, and non-milk turnover also grew, giving an average rise in income of 12%. “However, costs were also up, with feed prices soaring by 20% and contracting costs rising by 16%, which eroded farmers’ improved returns,” said Mr Vickery.

Looking ahead, the 2009/10 financial year could be considerably tighter. “The milk price has been weakening, oil-driven costs seem to be rising again, and despite the continuing low Bank of England base rates the cost of new borrowing has risen. On the positive side, forage quality should be better and the weaker sterling has ensured a higher yield from this year’s single payment.”

Farmers must budget carefully to accurately predict their financial performance before the end of the year, said Mr Vickery. “If the figures are not as good as last year, dairy producers could be in a position to show a loss and claim back some of the tax paid over the past two more profitable years. Early consultation with an accountant who understands farming issues is very much recommended.”

Steve and Heather Tucker of White Row Farm Shop, Beckington, Frome, joined more than 1000 people at the glittering awards dinner last week (8^th October), where they learnt of their success. Held at the Grosvenor House Hotel in London to celebrate the achievements of British farmers, the awards are the highlight of the food and farming year.

“We are absolutely delighted to have won this award – we are passionate about the food we produce and what we sell at White Row, and this has obviously come across to the judges,” said Mr Tucker. The couple set up the business on their pig farm in 2000, following a downturn in the pig industry. It now includes a farm shop, café, deli, butchery, fish counter and a garden shop. “We took a huge gamble, but we have gone from strength to strength and haven’t looked back.”

Crucially, throughout their expansion the Tuckers stuck to their original ethos of providing local, home-grown produce, as well as sourcing as much as possible from local producers. They are also keen to educate children about food and where it comes from, and are now supplying local schools with vegetables. “I’d like to open the farm up more to the public to show them what goes on, and to set up a commercial kitchen and cookery school where people can come and learn how to best use local produce,” said Mr Tucker.

Pearce Hughes of Asda, which sponsored the highly competitive category, said: “The Local Farmer of the Year is a great accolade and Steve and Heather Tucker are worthy winners. Their passion for growing fresh produce and their plans to educate local children can never be underestimated.”

The couple have enjoyed tremendous support from their loyal customer base, as well as their advisors and accountant Mike Butler at Old Mill Rural Services, who joined them at the awards ceremony. “I am thrilled that Steve and Heather have won this award, recognising the hard work and dedication that they both put into the business,” he said. “They have transformed it from a struggling pig unit to a thriving shop and café, attracting more than 3000 visitors a week.

“By staying true to their roots with local, fresh, home-grown food, they have ensured the success of their business, which is bucking the economic trend with growth of 20% this year, and provides employment for 45 local people. Their pride and passion is a real inspiration, and I am delighted to have played a small part in helping these true ambassadors for local food.”

To learn more about White Row Farm Shop see www.whiterowcountryfoods.co.uk or visit the farm, located just off the A361 near Beckington, Frome.

For more information, call Heather or Steve Tucker on 01373 830798.

Although many traditional buildings are an integral part of the farmstead, a number have fallen into disuse due to inability to house modern farm machinery or livestock. HM Revenue & Customs has started to hone in on this area, questioning whether such buildings should qualify for Agricultural Property Relief from Inheritance Tax.

“This is a serious and worrying trend, potentially rendering many thousands of farmsteads liable to a heavy tax burden,” says Mike Butler, partner at Old Mill Rural Services. “Buildings which HMRC perceives as not being in true agricultural use no longer qualify for 100% tax relief, which could give rise to a large tax bill.”

The key question is whether the buildings were occupied by farming in the two years prior to the owner’s death, says Mr Butler. “If they were either unoccupied, or merely used to store sundry bits and bobs, there is very little argument to defend an Agricultural Property Relief claim.”

Importantly, many traditional farm buildings carry an inherently high value, due to the possibility of conversion into residential dwellings or commercial units. They therefore form an extremely valuable part of many deceased farmers’ estates. Although Agricultural Property Relief only covers the agricultural value of the building, any excess can be covered by Business Property Relief, as long as the building is used in the farmer’s own business.

To avoid being saddled with a large Inheritance Tax bill, farmers should ensure the buildings are in constant agricultural use, and retain proof of this. “Keep photographic evidence of how the buildings are used; ensure they are noted on insurance documents as being used as part of the farming business; and where they are used to store chemicals or fertiliser, make sure the appropriate certification is given for that building,” says Mr Butler.

Maintaining or renovating old farm buildings is also a useful tip. “Well maintained buildings provide persuasive evidence that you want to keep them in serviceable agricultural use. By showing the repairs through the farm accounts, you clearly demonstrate that the building is still important to the farming operation. Doing so does not only provide full tax relief on any work done, it could secure 100% Agricultural and Business Property Relief in the future – a valuable saving for any farming business.”

The Wilson family have enjoyed considerable showing success with both their Holstein and Jersey herds this year, and scooped the coveted Cattle Presentation Award with their Jersey cow, Bluegrass Heritages Lady.

“I am delighted to present this award to Hefin and his son Ifan, who takes such an interest in the farm,” said Ian Sharpe, partner at Old Mill’s Shepton Mallet office. “This is a real family affair, with three generations involved in the dairy enterprise at Tregibby Farm, Cardigan, Dyfed. It is always heartening to see people who take such pride in their work, and who display such wonderful animals for the general public to appreciate.”

The Wilson family also won the prestigious Supreme Championship at the Show with another Jersey cow, Bluegrass Jazzman Panama – the first Jersey ever to claim the award.

The Royal Bath & West of England Society was elated with another record attendance of more than 6200 visitors, with the Show continuing to grow steadily year-on-year. With major investment in the pipeline, the showground, near Shepton Mallet, Somerset, is set to become the country’s first energy self-sufficient showground.

The move is part of an international effort to crack down on tax evasion, and comes after an agreement between Britain and Liechtenstein which encourages British clients with secret accounts in the Alpine state to disclose billions of pounds in untaxed money or face a penalty rate of at least 30 per cent and an increased risk of criminal prosecution.
While HM Revenue & Customs can now seek information from banks, it is offering Brits the chance to settle unpaid liabilities at a lower penalty rate of 10 percent under the New Disclosure Opportunity, and south west accountants Old Mill is warning people affected to act now.

“These two developments add considerably to HMRC’s powers to help counter tax evasion,” said Bruce Lockhart, Tax Partner at Old Mill Accountancy LLP, “and those who have been evading tax by keeping their money offshore will now have to own up or risk paying some serious fines; some could even face criminal charges ”

Under the “New Disclosure Opportunity” (the original “Offshore Disclosure Opportunity” in 2007 focused on the customers of five large banks), tax payers are being given a chance to come clean and to avoid potentially massive penalties, and Old Mill is encouraging those affected to act now.

“As well as being an opportunity to regularise their personal affairs, the New Disclosure Opportunity offers tax payers the chance to manage down and contain related exposure to penalties, to a probable 10 per cent of the tax previously unpaid (or 20 per cent for those who didn’t respond to HMRC in 2007), in response to an offer made under the original Offshore Disclosure Opportunity”, explained Mr Lockhart.

There is a three month window of opportunity from 1 September 2009 during which  tax payers will be able to approach HMRC with a view to making full disclosure (in certain circumstances this period will be extended to 12 March 2010 where disclosure follows a prescribed and “on line” process).

“In the event of continued non disclosure and future “discovery” on the part of HMRC, which is now far more likely given their new powers, delinquent tax payers can expect little sympathy on the part of the Authorities,” warned Mr Lockhart, “expect draconian penalties of up to 100 per cent of the tax unpaid in addition to interest charges.

“This is possibly HMRC’s largest tax evasion initiative to date – those who ignore it do so at their own peril,” he said.

“With cereal prices in freefall and many other commodities following suite, a lot of farmers are potentially operating at a significant loss this year,” says Partner Mike Butler. “Even though they benefited from improved profits last year, many will be worried about the financial outlook over the next 12 to 18 months.”

Poor summer weather has compounded lower commodity prices, with many farmers suffering from low cereal yields and unwelcome drying costs, particularly in the West Country, he adds. “The strengthening Pound and firming oil prices are also adding to the uncertain economic outlook.”

Farmers must always be able to react quickly to volatile market conditions – and part of that must be in the management of their tax affairs, says Mr Butler. “Over the past couple of years we have concentrated on minimising tax on what were, for many, relatively strong profits. But now farmers’ focus must be on recovering tax and maximising cash flow during this difficult trading period.”

Historically, farmers could only recover tax paid in the immediate previous year – but recent concessions mean they can recover tax paid up to three years prior to a loss-making year, he adds. In addition, they can make use of the usual tools to mitigate tax, such as farmers’ averaging; 100% tax relief on equipment expenditure up to £50,000 per annum; and pensions relief. 

“It is also important to operate the correct year end. It is possible to accelerate the reporting of more difficult trading conditions, to reduce the delay until tax refunds can be obtained.” Other options include changing the timing of commodity sales, and reducing tax payments on account.

“Old Mill is already seeing tax savings of more than £30,000 per farming business – or typically £7000- £8000 per partner,” says Mr Butler. “Farm businesses, particularly those which have paid significant amounts of tax in the previous three years, should be looking at their options now. It may be possible to recover some of that tax, reduce future payments on account, and minimise the overall tax burden by careful planning during the remainder of the financial year.

“Farmers and rural businesses should also seek to maximise support in the form of tax credits, which can be a vital lifeline for families during low income periods. With cash flows becoming tight, and many businesses likely to be operating at a loss, it is imperative that farmers plan their fiscal affairs in the most beneficial way possible.”

 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. 

Many farmers have diversified into contracting or other ancillary businesses, and do not realise that doing so could jeopardise Inheritance Tax relief on their farmhouse and other assets, says Catherine Vickery, rural tax consultant at Old Mill.

“Often diversifying out of the main farming enterprise is a gradual process, particularly in the case of agricultural contractors, who don’t realise that they are no longer farming from a taxation point of view.”

Contractors who are no longer farming their land in-hand stand to lose Agricultural Property Relief (APR) on the farmhouse, leaving it open to 40% Inheritance Tax on anything over £325,000.

Where businesses have been trading for two years or more, they will benefit from 100% Business Property Relief (BPR) on their buildings, machinery, and other assets, explains Mrs Vickery. “However, this does not include the farmhouse, and there is an additional problem where assets are owned by an individual but used by a partnership or company.”

In these cases, the individual must have a controlling interest in the partnership or company – or the assets will not qualify for any BPR. Even where they do have a controlling interest, the assets only qualify for 50% BPR, leaving the remainder open to taxation at 40%.

“This is very common with land and buildings, as we frequently see contractors trading as partnerships or companies, using premises owned by one of the individuals. As a result only 50% BPR is available, and beneficiaries will be levied with a hefty, and unnecessary, tax bill.”

Fortunately, land and buildings which are rented out to another farmer will still qualify for APR. But where property has a hope value, perhaps due to development potential, the extra worth will not be eligible for relief. “In these cases it might be better to use those buildings in the contracting business and obtain full BPR instead,” says Mrs Vickery.

Tenant farmers should be particularly careful when diversifying, as they could breach the conditions of their tenancy and endanger their landlord’s tax position, she adds.

“In all cases it is extremely important to consider how your estate is structured, to take maximum advantage from Agricultural and Business Property Reliefs. Where these reliefs are not available, a little careful planning can go a long way to reducing potential liabilities in the future.”

“Most people don’t take advantage of their full tax free allowance,” says Simon Cole, Chartered Financial Planner at Old Mill Financial Services, “and by not using our full allowance we are in effect, giving money back to the taxman.”

“The current allowance is £7,200, up to £3,600 of which can be put into a Cash ISA; the rest – or the entire amount if you wish – can be invested into a Stocks and Shares ISA.

“And, although interest rates are very low at the moment, doesn’t mean its not good financial sense to invest in an ISA.

“In fact, given the level of Government borrowing at the moment, the likelihood is that tax will go up as the treasury needs to create revenue through tax.  A way that the individual investor can do something to avoid some of these rises is by making use of any tax breaks they can.”

And, says Mr Cole, ISAs should be at the top of the list for this tax year, and using your new allowance from 6th April onwards – up to £14,400 sheltered from tax in a matter of weeks.

“ISAs offer tax breaks for both higher and basic rate tax payers because you pay no capital gains tax, and no additional income tax making it one of the most tax-efficient ways to save and invest.”

And for those who have already used their allowance but are not happy with the returns they are receiving, transferring your existing ISAs to another ISA fund manager at any time is possible if you are not happy with your current deal.

“Cash ISA rates are not great at the moment,” he said, “and although you can transfer your Cash ISA to another, better paying Cash ISA, it is worth taking a look to see if it is worth transferring your cash into a Stocks and Shares ISA instead.

“When rates are high, you can get fairly good income and growth from a Cash ISA with little or no risk, but now, it is hard to get the same returns unless you are prepared to take on a little more risk.”

Although Stocks and Shares ISAs do have more risk, they also offer the potential for higher returns over the long term, and now, with stock markets so low, it could be a good time to invest, advises Mr Cole.

“It is also possible to make regular investment contributions; when the markets are falling, you buy more with your payment each month which means that when the market rises again, you can really gain, and of course, the profits you make are completely tax free.”

To find out more about making the most of your tax free allowance, contact Simon Cole at Old Mill Financial Services on 01935 709364 or by emailing simon.cole@oldmillgroup.co.uk or visit www.oldmillgroup.co.uk

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.”

“Traditionally, agriculture has fared better during economic downturns than other sectors,” says Partner Ian Sharpe. “Although some farmers may find it difficult to secure credit, the industry as a whole looks set to ride out the economic storm. Many farming businesses are backed by property assets, and despite the drop in house prices, the market for land and farms remains strong.”

Naturally, there are threats – most farms now rely on some form of diversification, which may be more likely to be affected by the downturn, he adds. “Anyone with holiday cottages could face an uncertain year – but with more people holidaying in the UK, farm tourism and accommodation could actually stand to benefit.”

Farm shops could potentially suffer from decreased spending on food and drink, although demand for local produce remains strong, says Mr Sharpe.

The most vulnerable sector is likely to be industrial units and office lets. “The number of businesses going into administration has soared, so landlords must be aware of potential problems with their tenants. Not only could they be left with rent owing, they may struggle to rent out units after they have been vacated.” Landlords left with empty commercial properties will also be liable for full business rates, so should take advice on how to keep such expenses to a minimum, he adds.

The first step to recession-proof a business, and even take advantage of the new economic climate, is to assess cash flow requirements, says Mr Sharpe. “Most businesses do not fail due to a lack of profits, but because they run out of cash. Prepare a budget and if you are likely to need more borrowings, give your bank as much warning as possible.”

Farmers should also keep on top of money owing and chase up debtors regularly, he adds. “In addition, stay up to date on your own payments, so that you do not suffer unnecessary interest or late payment charges.”

With the Bank of England base rate falling to 0.5%, the cost of borrowing has dropped sharply, making now a good time to invest for the future. “Many builders and contractors are struggling to secure work, so farmers have the perfect opportunity to carry out repairs at competitive rates,” says Mr Sharpe. “Now may also be a good time to consider fixing loans at current interest rates, to reduce risk in these volatile markets.”

The weaker Pound against the Euro is also hugely beneficial, boosting the value of the single farm payment by around 20%. “It is possible to lock into this favourable exchange rate by taking out a Euro loan from your bank. This not only removes the risk of future currency fluctuation, it could significantly boost farm incomes,” he adds.

“While no sector is entirely sheltered from the economic downturn, farmers who protect against risks and take advantage of opportunities are most likely to weather the storm and strengthen their business for the future.”

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.”

The seminar, entitled “You, your car, company cars and tax” looked at a wide variety of topical issues relating to cars and the related taxation – both subjects close to many business peoples hearts.

Craig Howes and Mark Peters, Directors at Old Mill, spoke about the key issues surrounding the changes to company car tax. This is now calculated solely on cars CO2 emissions -  and it is now very important to consider the emission band the car sits in when buying a new car.

Craig and Mark, also talked about the Government’s change to the tax regime to abolish the writing down of balancing allowance for cars over £12,000. This significantly extends the time it takes to get tax back after the car has been sold – and for high emission cars this could now take 20 years. This means that people should seriously consider the tax advantages of leasing. Leasing tax rules are much simpler than for owned cars and all costs involved are claimable against tax, so leasing, said Old Mill, could be the way to go.

Tony Grice, Sales Development Manager for Volvo talked about corporate manslaughter and the fact that from April this year, if employees are involved in a fatal car accident whilst on business – even if they are driving their own private car, their employers could end up in court facing charges of causing death by negligence. It is the responsibility of employers to ensure any vehicles used by employees on business are fit for the purpose. This is causing companies who have ceased providing company cars to reconsider their position.

He highlighted the importance of car safety and the wellbeing of employees using thought provoking images and videos to show which cars are the safest to drive.

Craig Howes comments “This was a different type of seminar looking at a very different topic. However the response of the businesses that attended was very positive. It bought to their attention important matters which they may well have overlooked.

Anyone who would like more information about any of the issues raised should contact Craig on 01935 426181.

Old Mill’s Martin Taylor presents 1st prize to Thomas Hunt (left) and Michael Berside (right) for Thomas Hunt’s  pair of Exmoor Horns. Thomas and Michael are both ‘A’ level students from Bideford in North Devon. Thomas has 30 Exmoor Horn ewes and was delighted to pick up a 1st prize at this, his first ever show.

Neil Cox presents 1st prize to Leslie Cook (right), from Over in Cambridgeshire, for his winning Hereford steer, with his daughter Frances (left) holding her father’s 2nd prize steer.

Julia Banwell presents the winning rosette to Henry Dart (right) and his son Christopher (left), from South Molton in Devon, for their pair of Exmoor Horn wether lambs.

Although R&D is not an immediately obvious expense for farmers, those investing in specialist breeding programmes or developing particular technologies for use on the farm could qualify for the tax relief, says accountant Old Mill Rural Services.

“Tax breaks for this type of investment have been around for a number of years, but many businesses have been deterred from making an claim as they feel that they need to be involved in very high-tech work – this simply is not the case,” says corporate tax manager Isobel Savage.

In August, HMRC increased the tax relief from 150% to 175%, enabling small and medium-sized businesses to deduct 175% of qualifying R&D expenditure against profits.

Businesses must spend at least £10,000 per annum to qualify, but this can include a wide variety of related costs, including employee salaries, overheads such as heat and light, materials costs and even an element of costs from subcontractors, she adds.

“The R&D work must be relevant to the business and there needs to be an intention to exploit the benefits from this commercially.” The work should involve developing scientific or technological knowledge that isn’t commonly available, to improve a product, process or service.

“In related businesses such as agricultural engineering or added-value food production the opportunities are far clearer,” says Mrs Savage. “While many businesses may already be making claims, the increase in the tax allowance should lead all businesses engaged in these sectors to consider their options carefully.”

A business with qualifying expenditure of £12,000 a year could now claim a deduction for tax purposes of £21,000. For a higher rate taxpayer that would reduce the tax payable by £3,690, while for a small company paying tax at 21% it would save £1,890.

“R&D is an essential part of many agricultural businesses, but hands-on farmers may not even be aware that they can claim these expenses back,” says Mrs Savage. “With the increase in the relief available, farmers and related industries could make considerable savings. And with the deadline for online tax returns looming, businesses should speak to their tax advisor and work out whether they are eligible to claim this valuable tax relief.”

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.

Rural accountant Old Mill has brought together a range of industry experts to offer farmers the best information and advice at an important evening meeting on 11 November.

“Planning has always been an important part of successful farming enterprises,” says Andrew Vickery, Manager of the Old Mill Rural Services team in Exeter. “But in such uncertain times it is even more essential, so that you can protect against unforeseen difficulties and capitalise on opportunities as they arise.” Speakers at the meeting, entitled Farming Today, and Tomorrow, will examine the state of the industry today and identify areas of potential opportunity, as well as possible pitfalls, over the coming months and years. Kicking off will be Euryn Jones, Barclays’ National Agricultural Specialist, who will share his thoughts on how farmers can plan their future in an unpredictable world. John Warrington, Farm Consultant with Promar International, will examine Promar’s latest dairy farm performance data, so delegates can see how their own farm results compare and pinpoint areas to increase profitability. Finally, Andrew Vickery will identify a number of both current and longer-term tax issues facing farmers. “These can have a significant impact on cash flow, your bottom line and longer term succession plans,” he says. “By bringing together this cross-section of industry specialists and encouraging discussion among all of our delegates, we hope to give farmers a clearer picture of where their business is heading, and offer them the tools to make the most of whatever the future might hold.” The meeting will be held at Padbrook Park Golf Club, Cullompton, Devon, on 11 November at 7.00 for 7.30pm, followed by a hot supper. To book your place, or discuss individual tax planning issues, call Old Mill Rural Services on 01749 335007. Journalists are welcome to attend.

“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.

At the end of the five years, returns for the investor are linked to the best two performing portfolios; the plan completely disregards the worst performing while offering 100% capital protection.

Thanks to its low risk and potentially high gains, the ABC Hindsight Plan has proved very popular with investors. It opened for subscriptions on July 21st, closed on Friday and in that short period saw investments of more than £3.3million.“The ABC Hindsight Plan certainly captured the imagination of our clients” says Simon Cole, Chartered Financial Planner and Partner at Old Mill.  “Many people understand the benefits of long term investing but may have been put off by recent stock market movements,” he said, “but this Plan allows our clients to invest with a far greater degree of confidence.”

“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.

“The ABC Hindsight Plan is a five year plan that is linked to three portfolios; Adventurous, Balanced and Cautious,” explains Simon Cole, Chartered Financial Planner and Partner at Old Mill. “Each portfolio invests differently, gaining exposure to a wide variety of areas, including emerging markets like China as well as funds in the UK, America, Europe and Japan. All three portfolios will also have commodities exposure, while the Balanced and Cautious portfolios will also benefit from rising inflation,” he said. “At the end of the five years, returns for the investor will be linked to the best two performing portfolios; the worst performing will be completely disregarded. And, provided the investment is held for the full five years, the ABC Hindsight Plan offers 100% capital protection.” “The ABC Hindsight Plan is exclusive to Old Mill,” says Mr Cole, “and due to its low risk and potentially high gains, we think it is going to be very popular with our clients.”

In order to make the plan as tax efficient as possible, investments can be made directly to utilise Capital Gains Tax allowances, tax free via an Individual Savings Account (ISA) or Self Invested Personal Pension (SIPP), or through an Offshore Bond, where tax can be deferred. The minimum investment for the ABC Hindsight Plan is £7,200 via an ISA, which is the maximum ISA investment for this tax year – or £10,000 via any other investment product. The ABC Hindsight Plan has limited availability, opening for subscriptions on July 21st and closing at the latest on September 12th, if not already fully subscribed. Early investors will also receive a competitive rate of interest during the offer period.

To find out more about the Old Mill ABC Hindsight Plan, telephone Gavin Jones 01749 343366 or email sheptonmallet@oldmillgroup.co.uk For more information about this release contact Alan Stone at Old Mill 01749 335007 or email alan.stone@oldmillgroup.co.uk

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.”

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.

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.

Ends.

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.”

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.

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.

Ends.

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.”

Ends.

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.”

Ends.

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.”

Ends.

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.”

Ends.

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.

Ends.

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.

Ends.

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.

Ends.

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.”

Ends.

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

Ends.

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.

Ends.

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!

Ends.

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.”

Ends.

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.”

Ends.

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.

Ends.