Issuu

Agricultural Focus

INSIDE

• Pensions - what should you be thinking about?

• How will the new Renters’ Rights Act affect you?

• Knowing your numbers: turning today’s pressures into better decisions

• Dawn to dusk charity tractor pull

• Meet the team: Jess Coombs

Pensions - what should you be thinking about?

Since 2015 when pension savings were excluded from the Inheritance Tax (IHT) net, they have been a tax efficient way of passing funds on to future generations. The result being a growing number of pension holders deciding not to draw from their fund but pass it on to their beneficiaries.

Whilst pensions are not currently subject to IHT, they are not always tax free. Income tax may be payable, depending on the age of the pension holder when they die. If they die before the age of 75, their pension will be passed on tax free, whereas if they die after 75, the beneficiary will pay income tax when drawing down.

From 6 April 2027, the rules are changing, and unused funds held in pensions will be included within an individual’s estate and, therefore, potentially subject to IHT.

In addition, the rules regarding the income tax treatment are to remain in place. This means that for individuals who die after the age of 75, their beneficiaries face ‘double taxation’ i.e. paying IHT and income tax on the pension. The combined tax liability being approximately 52% for basic rate taxpayers, and up to 67% for additional rate taxpayers.

This has led many to revisit their plans for their pension to ensure they are ready for the new rules. Some areas to consider are:

Reviewing your expression of wishes form to ensure this remains reflective of your wishes and provides flexibility to the scheme trustees. The IHT spousal exemption rule applies to funds held in pensions, meaning it can still pass to a surviving spouse IHT free.

Reviewing your existing pensions to check if they provide all available death benefit options. Some schemes do not cater for all the options, which can mean funds are not distributed in the most efficient way.

Considering pension consolidation to simplify your affairs. Noting there are several factors to consider before consolidation.

Review of scheme assets to ensure these are organised in the most efficient way. The new IHT rules on pensions apply to the account itself, irrespective of what underlying assets are within it. If the scheme owns assets such as agricultural land or business property which would qualify for IHT relief if held personally, consider removing these assets.

Consider drawing from the pension to fund IHT planning. There may now be benefit in drawing funds out of pensions to fund other, more IHT efficient strategies, such as gifts to beneficiaries, or IHT efficient investments.

Review of overall estate to ensure this is arranged as efficiently as possible and in line with your objectives. Considering the IHT position of your pension should form part of an overall IHT plan.

Whilst the upcoming changes to pension funds are disappointing, there remains significant tax benefits associated with pensions, and with careful planning there are options available. Like many things, there is no one size fits all, and the best approach will be dependent on your overall circumstances and objectives.

If you would welcome a discussion regarding your pension affairs, please contact Andy Hogarth in Hazlewoods Financial Planning team on 01242 680000.

How will the new Renters’ Rights Act affect you?

What has changed?

The Renters’ Rights Act has come into force from 1 May 2026. Key changes include:

The abolition of Section 21 ‘no fault’ evictions. Landlords must now provide a valid reason to regain possession, such as selling the property, moving in, or serious rent arrears.

The end of fixed term assured shorthold tenancies (ASTs). All tenancies are now periodic (rolling), continuing indefinitely until either party ends them.

Changes to rent reviews, with a statutory process to be followed.

Requirement for landlords to register themselves and their properties on a database from late 2026.

Who is impacted?

Any diversified farming business with properties let under an AST is caught. In addition, the following situations within the sector will also be impacted:

Farm workers

Employers who house their employees will often give them an AST with a rent of £250 per annum. This ensured they fell within the statutory provisions and had the power to remove the employee if they ceased working for them. Such tenancies will now be caught by the new rules. Employers may want to consider the use of service occupancy agreements, which are outside the scope of the Act.

Gifted properties when the donor rents the property back Where properties are gifted and rented back, typically when the donor continues to live in the property and wants to avoid a gift with reservation of benefit, the arrangement becomes a standard tenancy once rent is paid, and exclusive occupation exists. The tenant gains full legal rights, regardless of family relationships. If circumstances change, landlords must follow the formal eviction process.

holiday lets for longer periods over the winter) are now fully regulated. Landlords must comply with all obligations, and flexibility is lost.

What are the practical implications?

Reduced flexibility means short-term letting to manage cash flow could become problematic as could letting properties on a temporary basis whilst awaiting occupation by a worker.

The increased regulation means that most landlords will need professional input to ensure that compliance has been met, meaning additional costs to be compliant.

Rent increases are restricted, making it harder to keep pace with inflation, or rising mortgage and other costs.

Selling properties may take longer due to reduced control over possession timing, affecting Capital Gains Tax (CGT) planning. It may also be harder to reoccupy properties to benefit from CGT Private Residence Relief (PRR), potentially increasing taxable gains.

Non-compliance

Non-compliance can result in penalties of up to £7,000 for first or minor offences and up to £40,000 for serious or repeated offences.

What to do now?

If you have let residential properties on a farm or estate, now is the time to act to ensure compliance with the new Renters’ Rights Act.

Where agents are engaged, these changes are likely already being addressed.

However, those managing properties directly should seek professional advice to avoid breaches and unnecessary penalties.

Knowing your numbers: turning today’s pressures into better decisions

It’s no secret that farming margins are under pressure. Input costs remain high, labour is hard to find and even harder to manage, and pricing uncertainty shows no real sign of settling.

In this climate, the most successful businesses aren’t just the most productive. More often, they’re the ones with the best grip on their numbers.

With HMRC’s digital requirements increasing the reporting burden, most farms are already producing more data than they used to. The challenge now isn’t collecting the information, it’s turning it into something useful and easy to understand.

Is your software helping you?

Most farming businesses now use some form of accounting, or farm management software, but many only scratch the surface of what these systems can do.

If your software is:

Only used for VAT compliance

Not producing regular, meaningful reports

Hard to interpret or frequently out of date

Simply a way to send figures to your accountant

…then there’s a good chance you’re missing an opportunity.

Used properly, these tools should help you:

See in real time where money is being spent

Track performance across crops, or livestock enterprises

Allocate costs (e.g. repairs to specific machinery)

Keep an eye on cash flow, not just profit

Compare budgets to actuals to identify variances and trends

This doesn’t always mean changing systems. Often, it’s about getting more out of what you already have, perhaps with the right setup and support.

Do you know your cost of production?

One of the biggest strengths a farm business can have is a clear understanding of what it costs to produce what it sells.

That might include:

Cost per tonne of grain

Cost per litre of milk

Daily cost per head of livestock

Cost per job/implement for contractors

Labour cost as a percentage of turnover. Are you getting the most from your labour relative to acreage, or herd size?

If chasing an extra 20% of yield is costing another 30% in inputs, the numbers simply don’t stack up. Without these figures, decision-making quickly becomes guesswork.

Keeping a hold on costs and profitability

With costs increasing, chasing higher yields at any price is no longer sustainable. The old phrase still holds true: turnover is vanity, profit is sanity, but cash is king.

Ask yourself:

Do I know which parts of my business are making money, and which aren’t?

Have my input costs crept up over the last 12–24 months?

Am I reviewing spending regularly, or just at year-end?

Rather than just looking at one overall profit figure, break the business down and you may quickly highlight where money is being made, or lost. The best performing farms today aren’t necessarily the biggest, or the most intensive. They are the ones that know their costs, understand their margins, and use their numbers to make informed decisions.

No two farms are the same and getting on top of your figures doesn’t require a complete overhaul overnight. But it does mean shifting mindset, seeing record-keeping not as a chore, but as a tool to run a stronger, more resilient business.

Dawn to dusk charity tractor pull

On 14 April, our fantastic Farms and Estates team completed a dawn-to-dusk tractor pull in support of RABI, the farming charity that helps people in agriculture through challenging times.

Teams of 10 took turns pulling the tractor around Aston Down airfield in Gloucestershire for roughly 4km every hour, setting off just after 6.00am under a beautiful sunrise. It was a long, physically demanding challenge, but the team’s spirit never wavered, even when the day ended wet, cold, and muddy at sunset.

Thank you to everyone who has already donated and came out to cheer our team on. The motivational chant was a great boost to keep the energy high - watch the video at https://bit.ly/RABIpull

We’d also like to extend our sincere thanks to everyone who helped make the day possible - from the use of the airfield to generously loaning the tractor. Your support made all the difference.

If you would like to, there is still a chance to donate – scan the QR code.

We were delighted to raise over £12,600 for RABI.

Meet the team: Jess Coombs, Manager

I began my career in 2017, fresh out of university, when I came across a Hazlewoods advert in the Young Farmers newsletter. What initially felt like a fortunate coincidence quickly turned into a career defining moment. I joined the firm shortly afterwards and went on to qualify as a Chartered Accountant in 2021. Since then, my career has continued to develop, and I have not looked back.

Working as an accountant in the farming and equine sector is both varied and rewarding. The industry itself is constantly evolving and brings with it a unique mix of challenges and opportunities. No two clients are the same, which means the work always remains engaging. From navigating the complexities of diversified businesses, to advising on partial exemption rules, there is always something new to consider.

This requires both technical expertise and a genuine understanding of the rural sector, having grown up around horses, from sitting on one before I could walk, to competing in showjumping across the country as a teenager, I have developed a strong personal connection with the equine industry. This background makes it particularly fulfilling to support my clients and contribute to the success of their businesses.

Working with clients in the agricultural sector brings its own set of challenges and rewards. There is no doubt that it is a challenging time for the industry, with ongoing changes to legislation, increasing pressure from weather conditions, and tighter margins impacting many businesses. Being able to work closely with clients during these periods, to support their businesses and provide proactive and practical advice, is one of the most rewarding aspects of the role. Building strong relationships and helping clients navigate uncertainty is what makes the work so meaningful.

Hazlewoods has played a significant role in shaping my career, and the reason for that comes down to the people. Being surrounded by supportive and knowledgeable colleagues has created an environment where learning never stops. There is a strong culture of collaboration, where ideas are shared openly and everyone is encouraged to grow professionally. This has given me the confidence to develop my skills while also contributing meaningfully to the team and to our clients.