Category: Agribusiness Consulting Firms

Tax Planning for Farmers Under the 2026 Agricultural Property Relief Reforms

Posted on by Farazia Gillani

The government has proposed major reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026. These measures remain at the consultation stage, so details could change, but they are likely to reshape succession planning for farming families. At Apex Accountants, we support farmers with inheritance tax, estate planning, and succession strategies tailored to the agricultural sector. Our experience means we can help clients prepare for both the current rules and any future changes. Careful tax planning for farmers will be essential under these proposed reforms. This article outlines the changes, explains the risks for farming estates, and highlights practical steps to consider ahead of 2026.

What Is Changing in 2026?

Based on current government announcements, the proposed reforms include:

  • The first £1 million of APR/BPR-qualifying assets per estate to receive 100% relief.
  • Any value above £1 million to receive only 50% relief.
  • The allowance is to apply per person and not be transferable between spouses.
  • Unlisted shares, including AIM shares, will qualify for 50% relief only and will not benefit from the £1 million allowance.
  • Trusts will face the same £1 million cap on qualifying assets for ten-year periodic charges and exit charges.

If enacted, these changes will significantly alter how farming estates are passed down, especially those exceeding the £1m threshold. Many landowners are already reviewing their position to understand how the proposed rules on Agricultural Property Relief 2026 could impact succession.

Key Risks for Farmers

  • Estates above £1m could face an effective inheritance tax for farmers at around 20% on the excess.
  • Families may need to sell farmland or business assets to raise funds.
  • Relief could be wasted if both spouses’ allowances are not used effectively.
  • Trust planning may become more complex under the new rules.

Practical Tax Planning Steps

1. Get Your Farm Valued

Obtain an accurate valuation of farmland, farmhouses, buildings, and machinery to assess exposure under the proposed cap.

2. Review Wills and Ownership

Consider revising wills to use both spouses’ allowances fully. Options such as life interest trusts may help secure relief. Careful will planning is one of the most effective ways to manage inheritance tax for farmers while making sure allowances are not wasted.

3. Consider Lifetime Transfers

Gifting before April 2026 could benefit from the current unlimited relief regime. However, the seven-year rule still applies.

4. Check Trust Structures

Trusts set up before 30 October 2024 may have their allowance under the transitional rules. Later, trusts will share a single cap.

5. Plan for Cashflow

Even with APR, tax may still arise. Farmers should consider:

  • HMRC’s instalment option over ten years.
  • Life insurance to cover liabilities.
  • Cash reserves to avoid forced land sales.

6. Maintain Qualifying Use

APR depends on genuine agricultural use. Land held for development or non-farming purposes may lose relief.

7. Explore Business Restructuring

Review business structures, such as partnerships or companies, to see if they offer better flexibility under the new rules.

8. Consider Diversification Impacts

Diversification into non-farming activities (e.g., tourism, renewable energy) may limit APR eligibility. Assess each activity’s tax treatment carefully.

9. Monitor Proposed Legislation

The reforms are still proposals. Keep updated on government announcements, as final rules may change before April 2026.

10. Seek Professional Advice Early

Specialist guidance is vital to model tax liabilities, protect family assets, and take advantage of opportunities before the reforms take effect.

How Apex Accountants Supports Tax Planning for Farmers

The reforms are still proposals, but they are expected to take effect in April 2026. Early action can help families prepare for the potential impact. At Apex Accountants, we are already reviewing estate structures, trust arrangements, and lifetime transfers for farming clients so they are ready whichever form the final legislation takes. With expertise in succession planning and the proposed rules on Agricultural Property Relief 2026, we can provide guidance that fits your unique circumstances.

Start planning today. Waiting until the rules are finalised may limit your choices.

Contact Apex Accountants for tailored tax planning advice and protect your family’s farming legacy.

Why HMRC Investigations for Farming Businesses Are on the Rise

Posted on by Nida Umair

HMRC investigations for farming businesses are becoming more frequent, especially in the farming and agri-processing sector. Subsidy reporting, seasonal income, and complex VAT rules often make compliance difficult for agricultural businesses. When enquiries arise, they can quickly affect operations, cash flow, and confidence.

At Apex Accountants, we work closely with farmers and processors to manage these pressures. Our team understands sector-specific challenges such as subsidy claims, payroll for seasonal staff, R&D relief on agri-tech projects, and capital allowances on machinery. With nearly two decades of experience, we provide practical guidance to protect clients during HMRC reviews.

This article explains why HMRC targets agricultural businesses, outlines common triggers for investigations, highlights current areas of focus, and shows how professional support can help manage enquiries effectively.

Why HMRC Targets Farming and Agri-Processing

Agriculture and food processing face unique risks that often draw HMRC attention:

  • Irregular cash flows linked to harvest cycles and subsidy payments
  • VAT reclaims on machinery, feed, and input costs
  • Complex payroll for seasonal or migrant workers
  • R&D claims on agri-tech projects such as soil monitoring or precision farming

For example, a dairy processor reclaiming VAT on feed additives, or a farm using R&D relief for precision-drilling equipment, may attract additional scrutiny. The scrutiny of HMRC subsidy reporting for agriculture has intensified, particularly when payments from DEFRA or environmental schemes lack clear documentation.

Common Triggers for HMRC Enquiries

Investigations can begin when HMRC spots anomalies or patterns. Typical triggers include:

  • VAT returns that do not match supplier invoices
  • Overstated costs compared with turnover
  • Subsidy or grant income not declared correctly
  • PAYE errors for short-term harvest labour
  • Aggressive or unclear R&D tax relief claims

Recent focus areas include the reporting of DEFRA subsidies and tighter checks on R&D claims in agri-tech. Even compliant farms are sometimes selected for random reviews. Weaknesses in VAT compliance for farming businesses are another frequent reason for HMRC attention, particularly where input VAT on equipment and supplies is reclaimed without adequate evidence.

Managing an HMRC Investigation

During an enquiry, HMRC may request ledgers, subsidy receipts, payroll files, or machinery invoices. Apex Accountants support clients by:

  • Checking records for accuracy before submission
  • Responding directly to HMRC on your behalf
  • Presenting evidence of valid expenses and subsidy allocation
  • Reducing the scope of the investigation where possible
  • Negotiating fair settlements if mistakes are identified

This structured approach limits disruption and reduces penalties. Careful handling of grants strengthens HMRC subsidy reporting for agriculture, while precise records on input tax confirm compliance with VAT rules.

Common Misconceptions

Many businesses believe all farm machinery qualifies for 100% capital allowances. In reality, only certain equipment falls under the Annual Investment Allowance. Storage buildings, fencing, and some processing equipment may qualify for different reliefs. Misunderstandings in this area frequently trigger HMRC enquiries.

How Apex Accountants Handles HMRC Investigations for Farming Businesses

Farming and agri-processing businesses face growing scrutiny from HMRC, particularly in areas such as subsidies, VAT, payroll, and R&D claims. Choosing the right support can make all the difference. Apex Accountants combine sector knowledge with practical experience to manage investigations efficiently and reduce the risk of penalties.

We provide tailored advice, represent clients directly with HMRC, and help maintain accurate records so that farmers and processors can concentrate on production and growth. Our team also advises on VAT compliance for farming businesses, ensuring that claims and returns stand up to HMRC review.

Contact Apex Accountants today to discuss your situation and receive expert guidance on managing HMRC investigations with confidence.

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