Welcome to Autumn
Autumn on the farm is a season of reflection, as the land shifts from the vibrant greens of summer to the warm, muted tones of harvest time. Fields that were once bustling with growth now stand still with the fruits of labour stored away, hopefully hitting the market when the price is right.
2025 harvest has certainly been a mixed bag. At times all four seasons have made an appearance in the same day, leading to some extremely mixed results on the combine yield meter. Quality and prices also continue to be volatile, with what some may describe as another 12 months of “Up Horn – Down Corn”.
Of course, as one season comes to an end another starts. We hope that you enjoy looking forward, realising your plans for next year, and to reading this edition of our bulletin.
Basic Payment Scheme 2025
Farm cashflows are starting to receive a much-needed boost with the early payment of this year’s subsidy. Funds have been hitting farm bank accounts since Monday 1 September.
This is traditionally a tight time for cashflow on many farms, especially arable ones, where the full costs of growing the crops will have been incurred but sales proceed are yet to materialise.
While the early receipt of the money is welcome, it may temporarily mask longer term cashflow issues which may appear later in the year. As always, we would advise our clients where cashflow is an issue to have a twelvemonth cashflow forecast in place to identify future pinch points so that mitigating action can be taken well in advance. Forewarned is forearmed as they say.
The Hidden Challenges of Generational Wealth
Recent, widely publicised, changes to IHT and fears that further adverse changes are still to come has prompted an acceleration of lifetime gifting, with many “children” gaining access to significant wealth much earlier than they would have anticipated.
Besides the obvious potential tax benefits this can be advantageous if it gives the younger generation access to capital earlier in their lives. This can have a transformational effect if they are able to use this capital wisely and hopefully grow it for the benefit of themselves and future generations.
With wealth however comes responsibility and the pitfalls of second-generation wealth are well known. If you’ve just been handed something on a plate, you’re unlikely to appreciate the full value of the gift or the efforts that earlier generations have put in to building that wealth.
The phenomenon of “clogs to clogs” in three generations is well known, whereby the first generation works hard to build wealth, the second generation enjoys it but may lack the work ethic of the first, and the third generation squanders the inheritance or lacks the ability to maintain it, leading to a decline in status.
All well and good, but how do you stack the odds in your family’s favour? There are no definitive solutions but here are a few suggestions:
- Ideally children should start their working life by working away from home, out with the family business, and supporting themselves financially. It will toughen them up and give them an appreciation of the value of money. Both are essential life skills.
- When they do return to the family business, get them involved in the management of the business, so they appreciate how it works along with the challenges and risks faced. Hopefully this experience will lead to improved future decision making when they eventually assume control.
- Build a network of trusted advisors around the family to complement any gaps in your own knowledge.
- Dividing wealth equally between your children may not be the right thing to do. Equality and fairness are not the same thing, and some beneficiaries may be much better placed to exercise stewardship over family wealth.
Once you have inherited play to your own strengths and do what’s right for you. This could involve:
- Continuing to run and hopefully build the family business along historic lines.
- Continuing with the business but accepting that you might not be the best person to run it. Employing a manager or entering into a contract farming agreement with a third party may be more attractive options which could be more profitable and free up your time to pursue other activities.
- A full or partial disinvestment to release capital to invest in new ventures with potential for higher returns provided you have the necessary expertise.
Preserving wealth down the generations takes long term thinking and planning, but with the right approach you can hopefully stack the odds in your favour.
Celebrating Diversification at the Scottish Agriculture Awards
We’re delighted to be sponsoring the Diversified Farm of the Year Award at the Scottish Agriculture Awards 2025, taking place on 23 October in Glasgow.
For us, this isn’t just about an award ceremony. It’s about recognising the creativity and resilience that sit at the heart of Scottish farming. Diversification is what keeps farms strong — whether that’s welcoming visitors, exploring renewables, or branching out into new products. It’s about adapting, finding opportunities, and helping rural communities to thrive.
Scottish agriculture is facing big changes, from shifting markets to climate challenges. Farms that diversify show what’s possible. They’re leading the way, proving that innovation and tradition can sit side by side to build a sustainable future.
“Diversification isn’t just about survival, it’s about creating opportunities for farms, families, and the wider rural economy,” says Mark Smeaton, our Head of Agriculture. “That’s why we’re so proud to celebrate the businesses leading the way.”
By supporting this award, we’re shining a light on those stories. It’s a chance to celebrate the hard work, ingenuity and determination that keep farming strong, and to share ideas that can inspire others.
We’re looking forward to hearing from this year’s finalists, celebrating their achievements, and raising a glass with friends and colleagues across the agriculture community.
New Slurry Stores – Know the Tax Rules
By January 2026, all farms (in Scotland) which produce slurry must have sufficient storage capacity for the total quantity of slurry estimated to be produced in 22 weeks by housed cattle or 26 weeks by housed pigs.
It is important to seek profession advice from farm advisors as to how much storage is required as the calculation brings in many factors which may be overlooked. The calculation must include all slurry produced, plus rainfall and washings that enter the store, and must account for any imports/exports of slurry during the storage period.
Tax Allowances Available for Slurry Store Creation
HMRC legislation states: Slurry storage tanks (above or below ground), reception pits, channels, and pipes generally qualify as plant and machinery for Capital Allowances. This would mean qualifying for the Annual Investment Allowance (AIA) and obtaining 100% tax relief subject to the annual limits.
In addition to Plant and Machinery allowances, the Structural Buildings Allowance (SBA) is available if part of the expenditure is deemed to be a “building” rather than plant (for example, a roof or cover over a slurry store that is not integral to its function), it may only qualify for the Structural Buildings Allowance. You cannot claim SBA on any part of the expenditure that qualifies for plant and machinery allowances. SBA is only for the “building” element that does not qualify for PMA. Current relief of 3% a year for 33 years.
Varied case law is available distinguishing the different costs from the varying reliefs and detailing the specifics. In order to allow for a robust claim which would stand up to HMRC challenge we recommend taking the following steps:
- Meet engineering & environmental standards
- Notify SEPA at least 30 days before construction or alteration.
- Obtain and keep written documentation.
- Grant funding
- Ensure all grant specifications are received in writing.
- Discuss grant income treatment with your accountant.
- Tax planning
- Involve your accountant early – tax treatment differs for new builds, improvements and repairs.
- Evidence
- Photograph the build before, during and after; showing tanks, pits, channels and pipes.
- Invoices
- Request clear, itemised invoices; avoid lump-sum invoices.
- Record keeping
- Keep all calculations, rainfall data, and professional advice on file.
Although new slurry storage infrastructure may be costly, it may well reduce your taxable profit, and subsequently lower your annual tax burden. However, it is important to seek tax advice in advance to ensure the correct costs are easily identifiable and you are fully aware from the outset of the differing tax reliefs available for the separate parts of the build.
Someone’s Not Telling the Truth
The Bank of England (BOE) cut the base rate from 4.25% to 4% on 7th August but left rates unchanged at the last Monetary Policy Committee (MPC) meeting on 18th September.
In reducing/holding rates, the BOE, who’s remit is to control inflation at 2% (try not to laugh out loud), were obviously predicting an improving inflationary environment which would justify lower interest rates.
Unusually, this is in contrast to what has been happening in relation to the interest rates demanded by investors on UK Government debt, where the yields on 10 and 30 year Gilts have increased by 15.94 and 26.12 basis points respectively over the last three months to stand at 4.704% and 5.533% for 10 and 30 year Gilts respectively at time of writing. Investors clearly think that inflation is not under control and are requiring higher interest rates to compensate.
This matters to farmers as fixed rate lending rates are to some degree priced relative to the yield on government debt.
Either way, someone’s not telling the truth. Could it be that the BOE is not quite as “independent” as they claim to be?
Upcoming Events: Agri Expo & AgriScot
Our Agriculture team will once again be represented at Agri Expo and AgriScot. Borderway Agri Expo takes places at the Borderway Mart, Carlisle on Friday, 31st October. Widely recognised as one of the UK’s premier livestock events, it is sure to be a well-attended event. Full details at www.borderwayagriexpo.uk
The Royal Highland Centre, Edinburgh, is set to hold AgriScot on Wednesday, 19th November. Similar to Agri Expo, AgriScot is one of the preeminent events on the agricultural calendar with a variety of trade stands and seminars. Full details at www.agriscot.co.uk
Both events open at 9am, parking and entry are free. We look forward to seeing you all there!
The Next Generation of Accountants
At EQ, we’re passionate about supporting the future of farming, and that means investing in the people who will provide expert advice and guidance to the sector for years to come.
This year, we welcomed an intake of new talent, with 20 graduates and school leavers beginning their accountancy careers with EQ in August 2025. Interest in our trainee programme has never been higher, with applications reaching an all-time record.
Each of our new recruits will embark on a structured training pathway, combining hands-on client experience with professional qualifications. For our agricultural clients, this investment means continuity of the trusted, knowledgeable service they rely on, alongside fresh energy and ideas from the next generation.
Many of our trainees will go on to specialise in areas such as tax planning, diversification projects, and rural business support. This ensures farming and rural businesses continue to receive the advice they need to grow and thrive.
Alex Carr, People & Culture Business Partner at EQ, shared: “We’re delighted to welcome such a strong group of graduates and school leavers this year. The record number of applications shows just how much interest there is in building a career with us, and we’re excited to support our new trainees as they grow into the trusted advisers of tomorrow.”
By nurturing young professionals, we’re building a strong foundation for both EQ and the communities we serve.
Take a Leaf Out of the Stoic’s Playbook
The 26th of November has been set as the date for the UK’s autumn budget by Chancellor Rachel Reeves.
Between now and then there will of course be endless talk of “black holes” that need filed and how those with the “broadest shoulders” need to pay their “fair share”. No doubt there will also be numerous pledges to protect “working people”, whoever they are, probably the sort of people who don’t actually work or even pay tax. Come to think of it, perhaps we should just bring out a prebudget bingo card with all these tired and predictable phrases and offer a prize to the first reader to complete it!
Potential tax increases will be leaked to the media on a weekly basis to gauge reaction and to soften up the taxpayer base for another onslaught. When the actual policies are announced, taxpayers will feel grateful that actual changes were marginally less bad than expected because of the prebudget expectations management exercise.
Against this backdrop it is easy to feel despair and to get panicked into making the wrong decisions in the lead up to the budget.
Readers could perhaps cope better with this level of uncertainty by adopting the mindset of the ancient Greek and Roman Stoics and their approach to life.
Some of the key principles of Stoicism that could come in handy just now are as follows:
- Focus on what you can control.
- The only things truly within your power are your judgments, thoughts, attitudes, and actions.
- Accept what you cannot control.
- External events, the actions of others, illness, and even death are beyond your control and should be accepted without distress.
- Anticipate challenges.
- Prepare yourself for potential difficulties and view obstacles as opportunities to practice virtue and grow stronger. Come to think of it, most farmers probably are already natural Stoics so adopting these principals should not present too much of a challenge.
We look forward to updating you on the outcome of the budget in our December bulletin, in the meantime stay strong.
Cereal Woes
Despite probably the best harvest weather in a generation and a great start to establishing crops for 2026 harvest, the cereal sector is in downbeat mode through a combination of low prices and, or those impacted by the summer drought, markedly lower yields and quality.
The November feed wheat futures price is currently trading at £167/t and for malting barley there are reports of sluggish movement and for rejected loads being sold as feed grain for c. £125/t or less.
Subdued demand from the distilling sector is not helping. Although not usually deserving of sympathy, it is interesting to note that Diageo’s share price has more than halved over the past three years to stand at 1,827p at time of writing. Knowing that the pain is being shared is probably of little consolation though.
Cereal farm profitability is likely to take a hit in 2025/26 which may present opportunities to reclaim tax paid in earlier years through either averaging or carry back of losses. We will certainly be looking out for these opportunities when we come to prepare next year’s accounts.
For those growers at the sharp end, the immediate need will be for cost control and cash flow management as well as ensuring that 2026 crops are off to the best possible start to lay the foundations for decent yields in 2026. Hopefully prices will recover.
For every debit there is of course a credit and livestock farmers may be in a position to make use of some of the cheap cereals available to formulate low-cost rations, providing a boost to livestock orientated businesses.
Can Renewable Energy Boost Your Farm’s Future?
As part of the Sumer Group, we’re able to draw on expertise from across the UK to share insights that matter to farmers and landowners. In this edition, we’re featuring thoughts from our colleagues at Scrutton Bland on the opportunities and tax considerations linked to renewable energy schemes.
With renewable energy projects on the rise, many landowners are being approached by agents and developers about solar farms and battery storage. For some, these schemes are becoming attractive diversification opportunities – especially with the Basic Payment Scheme being phased out – offering long-term, profitable income streams.
A recent case showed how, with the right structure, rental income from a solar farm could not only reduce the overall tax payable, but also support wider family goals: from providing for the next generation to covering school fees. One approach was to transfer the land into a limited company. This meant income was taxed at 25% rather than 45%, and capital gains could be deferred, while also creating a flexible pot of money for retirement. Careful planning also ensured that inheritance tax and “gift with reservation” issues were avoided.
Renewable schemes rely heavily on location and planning permission, so they may not be suitable for every farm. However, they highlight the importance of thinking laterally about future income streams and securing the long-term sustainability of the family farm.
If you’re considering renewable energy opportunities for your farm, our EQ Agriculture team would be happy to talk through the tax and structuring implications.
We are always happy to offer free, no obligation, initial consultations, and often act on a consultancy basis only. For more information on any of the services outlined in this bulletin, or to discuss a
particular issue with one of our advisers, please contact our Agriculture specialists.