Industry bodies have warned of the potential consequences of some of the proposed policies ahead of today’s Budget. Cedric Porter reports.
Red diesel plan would increase farm fuel costs by 80 per cent
The diesel bill of a 1,000 acre arable farm could jump by nearly 80 per cent if the Chancellor drops tax relief on red diesel in the budget. AHDB figures show that red diesel averaged 0.60 pence a litre (ppl) excluding VAT in February, while regular diesel at the pump was 107ppl without Vat. A 1,000 acre (404 hectare) farm using 80 litres of fuel per hectare a year would see its annual fuel bill increase from £19,390 to £34,580.
Threat of inheritance tax bills of nearly £200,000 for average farm
The inheritance tax bill for the average UK farm could be £181,000 if the Chancellor adopts a proposal to levy a 10 per cent charge on the value of agricultural estates on the death of owners.
The average UK farm size, according to Defra, is 86 hectares (212 acres), while agents Carter Jonas estimates that the average farm price in 2019 was £8,500 (£21,000) resulting in a total value of £1.806 million.
Bank of England frees up £190 billion to reduce impact of coronavirus
As well as slashing the base interest rate by 0.5 per cent to 0.25 per cent, the Bank of England has announced a £100 billion scheme to support lending by commercial banks to small and medium size businesses.
The measures have been brought in to help businesses weather the economic impact of Covid-19 coronavirus if staff are off sick, sales fall or there is disruption to production. The bank said that all the measures it has taken should free up £190 billion in extra lending.
Individual banks have pledged to waive some loan arrangement fees and relax some mortgage and loan repayments.