Investing in Farming and Agriculture Land and its Return On Investment

Investing in in farming and agriculture land and its ROI

Over the past five years, farmland has been seen as an investment comparable to many that could be made in the City, in terms of long term growth and security. There may have been a slight reigning back of land prices over the last twelve months, with Lincolnshire prime arable prices averaging £9,000 per acre on the Savills first quarter 2017 land survey, but the question remains whether investment is quite so attractive if the land is farmed.

Returns for farming land are currently estimated at between half and one percent of the capital employed. DEFRA’s research suggests that cereal, general cropping and pig and poultry farms tend to provide the greater returns on capital employed and the return tends to increase with the size of business.

To put this into context if 55 acres of land, ie £495,000 investment at today’s prices, is returning just £5,000; putting the same level of investment into residential property could realise £30-40,000 of income per year, perhaps even more with a little more active involvement.

Obviously there are many caveats drawn into the preceding example, and for many the opportunities required to achieve the land prices and returns would not arise, but it is important for farmers to ensure they are taking advantage of every opportunity that arises and to start to look at what may happen as the future of the basic payment scheme is debated.

The opportunity to become involved with property is one that can put in place an income stream as a contingency and if bought right, should hold its value. There are complications in terms of inheritance tax and have been changes in income tax recently for investment properties, so if this was something you were considering, Nicholsons would be happy to chat through the situation with you in advance of any transactions.

Dealing with Stress and Anxiety at Workplace- An Issue in Relations to Poor Management

dealing with stress at workplace nicholsons chartered accountants HR

The Health & Safety Executive has released figures regarding cases of stress, depression and anxiety. The total number of cases of work-related stress, depression or anxiety was 488,000. The number of new instances was 224,000. The impact of these cases was 11.7 million lost days. These numbers are frighteningly high. From our experiences I have seen an increase in issues relating to this type of illness and therefore I am not at all surprised by the numbers.

It is tricky trying to work out what the causes actually are for these types of illness; what the employee believes to be the issue is often very different from what management believes. I tend to believe that a person’s perception is indeed their reality, whether or not that may actually be the problem.

In the majority of cases I come across, issues of management (i.e. poor management) are very often at the centre of the problem. The perception that an employee is being treated unfairly or simply being treated wrongly is pretty common, as is the ability of management to deal with the workload pressures of its employees. These can include the expectation of too much work in too little time, unreasonable and unrealistically tight deadlines and poor man-management skills.

In terms of health & safety issues it is the construction sector that usually leads the way when it comes to health and safety statistics, but this is not the case with stress issues. Hitting the headlines in this area is the otherwise low-risk service sector, in particular those employees working in public sector roles such as healthcare and teaching.

Please remember that stress is just as much a hazard in the work place as any other hazard. There needs to be a stress policy in force and stress should be considered in terms of risk assessing. The HSE are quite prepared to prosecute employers who fail to take reasonable steps to protect their employees.

As readers of previous HS Broadcasts will know, health & safety comes under criminal law, but there is also civil law to be concerned about and I need to state that there have been a number of successful civil claims brought against employers who have failed in their duties to their staff.

I have heard that health & safety inspectors, whether HSE or Local Authority are starting to look at occupational health and reports of work-related stress are taken very seriously. So your managers need to keep a very close eye on staff and take action when they see warning signs.

Click the link below to contact Andy to chat about dealing with stress at workplace.

Head of Human Resource at Nicholsons Chartered Accountants Lincoln HR

What will happen to Businesses in Lincoln after the 2017 General Election

how the general election 2017 will affect business in lincoln

If the opinion polls are to be believed, which might be a bit of a stretch given their recent way-off-the-mark predictions (Paddy Ashdown’s promise to eat his hat after the close of polling at the last General Election springs to mind), then the gap between the two main political parties is now very small. This leads us to think more deeply about what tax planning might be required given the colour of the party in charge on 9th June.

If the Tory blue flag flies above Downing Street, there could be increases in tax at some point, as their manifesto no longer includes a promise not to raise taxes. Theresa May, and more particularly Philip Hammond (has anyone seen him recently?), felt the previous non-hike promise was too much of a constraint on policy–makers. No further details have been given over where tax rises might hit.

If, on the other hand, the red flag is flying, then we know that there will be tax rises at both a personal level and on corporate profits, to pay for Labour’s spending commitments. Personal taxes will rise for those earning more than £80,000pa, and the recent increases in Inheritance Tax thresholds will be reversed. Companies will see an increase in the rate of Corporation Tax on their profits from the current rate of 19% to 26%.

There is also uncertainty over the HMRC flagship policy of Making Tax Digital (MTD). Many of the proposals for MTD were removed from the last Finance Act, which was truncated when the snap Election was called. The change to the amount of tax-free dividends from £5,000pa to £2,000pa were also a victim of this action. It remains to be seen if either of these will be re-introduced in what is sure to be a second Finance Bill/Act of 2017 following the General Election.

Whichever party takes the reins of power, it will be necessary for taxpayers to make sure they keep an eye on their own personal circumstances, and how any tax changes might impact on them. It will no doubt keep us on our toes, and lead to a lot more tax changes, regardless of which party is in charge.

how will the 2017 general election affect business in lincoln

The self-employed pension crisis

business owners pension lincoln

The former Government Pensions Minister, Steve Webb, didn’t mince his words. In a report he published last April, he stated that selfemployed workers are heading for old-age poverty in their droves. A month later, the Federation of Small Businesses published figures showing that only 31% of self-employed people are paying into a pension, and that 15% don’t have any retirement savings of any kind.

If you are one of the 4.7 million UK people who run your own business, the focus that comes with it could understandably mean you haven’t started to adequately consider your own financial future. It might be tempting also to prioritise ploughing all of your savings into growing your business. But when it comes to deciding when you want to retire, you could be storing up some big problems.

Without an employer helping you to set up and contribute into a pension, you may be lacking provisions to fund retirement.

The value of pensions

There are significant tax advantages available from saving up via a pension as opposed to, for example, a regular deposit-savings account. If you’re still years away from retiring, it might be time to address any lack of pension provisions by arranging one now.

Although most self-employed people have the disadvantage of no employer making additional contributions into their pension, you can still benefit from income tax relief.

If, for example, you are a basic rate taxpayer who is charged 20% tax on your earnings, your pension provider will claim this back. What this means is that, for every £80 you pay into your pension, you end up with £100 in your pension pot. Higher rate and additional rate taxpayers could benefit even further.

These pensions do not include the same security of capital which is afforded with a bank or building society savings account.

The role of state pension

The basic state pension is a weekly income that everyone starts receiving when they reach a certain age – although the amount you are entitled to will depend on your National Insurance contributions.

It currently pays a maximum of £155.65 per week, which works out at less than £9,000 a year. The state pension will certainly help support you in retirement, but on its own this level of income might not be enough.

The future of your business

Many self-employed people will consider the business they own to be their retirement nest egg – but this still needs careful planning.

You may, for example, be looking to sell your business or pass it down the family. Others retire but remain the owner – or at least one of the owners – of the business. The potential advantages of doing so include receiving regular company dividend payments, which you can use as an income.

What you do with your business is a huge decision – both for you and your family. The sooner you start to consider its long-term future, the more time you will have to implement suitable plans towards a smooth transition.

Ask for help

Being self-employed is no picnic. Many people miss out on regular employee benefits such as sick or holiday pay; others find themselves working extremely long hours or getting by on an inconsistent level of income.

Dealing with these pressures for many years, a happy and contented retirement should be your reward for your blood, sweat and tears. By speaking to a financial adviser about your future, you can start to assess if you are set to have the provisions you need for a happy retirement – and if there is more you could be doing.

Dealing with Employee Rest Break Issue in HR Practice

issues with rest break in HR practice

Rest Breaks

A question that I am regularly asked concerns the law as regards rest breaks. The law is quite straightforward on this issue. If an employee works one minute more than 6 hours in a working day then they have a statutory right to a 20 minute, uninterrupted break. If however they work only 6 hours or less then they have no statutory entitlement to a break (although there may be a right contained within the contract of employment).

However this is only part of it, there are a few other factors to be considered;

  • If a working day exceeds twelve hours, only one rest break needs to be provided – there is no statutory entitlement to two 20 minute breaks.
  • Where the employee is entitled to this 20 minute break this should be taken at some point during the working day and not at the beginning or end of it. It cannot be used so that the employee can start later or finish earlier.
  • Please remember that you cannot force an employee to take any rest breaks indicated by the Working Time Regulations (WTR). If an employee chooses to work right through the 20 minute rest break, that is entirely down to the employee.

At a recent Tribunal case, the Judge was asked to consider rest break entitlements under the WTR, especially with reference to whether the employee must request the break or whether the employer is obliged to ensure that they are provided. This was the question before the Employment Appeal Tribunal (EAT) in Grange v Abellio London Limited 2016. Mr Grange (G) was employed by Abellio London Ltd (A) as a relief roadside controller to monitor and regulate A’s bus services.

G initially worked 8.5 hours per day, the intention being that he would take a half hour unpaid rest break during his working day, although he often found this difficult due to the nature of his work. On 16 July 2012 A e-mailed G stating that he was to now work straight through for eight hours, i.e. without any break, and leave 30 minutes earlier than he would have done under the previous arrangement. This is clearly in breach of the WTR.

G worked this way but in July 2014 raised a grievance claiming that A had failed to provide him with any statutory rest breaks. When this grievance was rejected, he brought a claim in the tribunal claiming that he had been denied his right to rest breaks under the WTR. The tribunal found that G had not been denied this right as he had never made an actual request to A for any rest breaks. G appealed to the Employment Appeal Tribunal (EAT).

The EAT held that an employer has a duty to provide a worker with a statutory rest break and confirmed that the rest break does not need to be requested. It went on to say that the entitlement under the WTR will be deemed to be “refused” if the employer puts in place any working arrangement that fails to allow a 20 minute rest break to be taken. However, please keep in mind that the Employee does not have to take the rest break if they do not wish to.

To know more about HR related issue, contact Andy Tomlinson or visit his LinkedIn page below.

Business Professionals Cycled from London to Lincoln

A group of 5 cycling enthusiasts cycled from London to Lincoln on a four-day journey just in time for the launch of the Knight’s Trail. The ride by the Knights on Bikes was to commemorate the 800th anniversary of the Battle of Lincoln.

It was also a ride inspired by Pedal Pride, one of the 36 Lincoln Knights showcased around the city on from 20th May – 3rd September.

Pedal Pride is a cycling-themed knight painted by Erin Fleming in a tribute  to her ex-professional cyclist father Brian Fleming. Pedal Pride is the chosen knight sponsored by Nicholsons Chartered Accountants.

The five men comprised of David Jockel, David Burgess, Simon Hall, Richard Hallsworth and Paul Harrison arrived at King’s Cross earlier to support Visit Lincoln and the Knight’s Trail in promoting tourism in Lincoln.

Simon Hall and Richard Hallsworth are two staff from Nicholsons Chartered Accountants who joined the group to mark this special occasion.

“This will be a great way for us to commemorate the Battle of Lincoln through our love for cycling and support to local artists who have painted the Knights” said Richard Hallsworth, Director of Nicholsons Chartered Accountant.

“Our active lifestyle and love for cycling goes in hand with Erin’s artwork which is why we decided to choose Erin as our artist” added Richard Hallsworth.

Firm Holds Bake Off Competition for Charity

Staff from Nicholsons held its Great Nicholsons Bake Off in conjunction of World Baking Day to raise funds for The Little Princess Trust following the success of the Cake Break event for MS Society in March.

The in-house competition saw a great number of staff submitting their bakes for a chance win the Great Baker title. The cakes were judged based on their shape, surface, texture and flavour by Aimee, a baker when she is not with her calculator for the day.

Becky Wells won the competition with her carrot cake topped with candies. Emma Murray, a Director at the firm said “It is a great way for us to engage with our staff and raise money for a selected charity at the same time”.

The day ended with a cake sale from the submission received. All funds raised goes to the Little Princess Trust.

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