Budget 2021 and its implications for farming businesses
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Budget 2021 and its implications for farming businesses

It’s been a week since the Budget 2021 announcement and, now the dust has settled, Acre’s Sarah Attwood summarises what the implications are for farming businesses.



  • Confirmed freeze on fuel duties. For the second year in a row, there has been speculation about changes to the agricultural exemption for red diesel usage and, for a second year in a row, there has been no change.


  • Inheritance tax thresholds frozen until 2026. There will be no changes to Agricultural Property Relief or Business Property Relief as had been feared.


  • Alcohol duties frozen, which is great for those diversifying into viticulture (as well as those looking forward to the pubs reopening).


  • Confirmed higher rate band for personal tax will not increase with inflation up to 2026. It is thought that 90% of farming businesses are operating as sole traders or partnerships, so they are likely to see an increase in taxation in real terms.


  • COVID 19 recovery support. The following COVID 19 support schemes and measures will help support some diversified farming businesses with income streams from hospitality (such as holiday lets, cafes, etc):
    • The Coronavirus Job Retention Scheme and Self-Employed Incomes Support Scheme have been extended to September
    • Restart Grants of up to £18,000 for hospitality and accommodation businesses
    • Reduced VAT at 5% will continue for retail, hospitality and leisure


  • Increased rate of Corporation Tax. From 2023 the rate will be 25% instead of 19%. Businesses with profit below £50,000 will continue to pay the 19% rate, but this will gradually increase up to 25% for businesses with over £250,000 profit.
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