The tax implications farmers need to know about the SFS
The finer details of how the £238m a year budget will be used to achieve these goals have been widely written about, however, what is less known are the tax implications for farmers moving over from the older Basic Payment Scheme.
Firstly, farmers who opt to stay in the Basic Payment Scheme will see their payments reduced to 60 per cent of current payment levels in 2026, 40 per cent in 2027, 20 per cent in 2028 and finally zero per cent in 2029.
Farmers who choose to participate in SFS from January 1 2026 will surrender their BPS entitlements when they move to the scheme, which would be recorded on their tax returns as a capital loss, and available to set off against any available capital gains in that year, or going forwards.
However, those who wish to stay with BPS until its end in 2029, would have to wait until 2029/30 to make a Negligible Value Claim (which results in a capital loss for the taxpayer) instead, as this is the point at which the BPS entitlements would end.
Whether a farmer surrenders their BPS entitlements to move to the SFS regime, before BPS ceases in 2029, or they wait for their BPS entitlements to cease to exist in 2029, the end result is a capital loss.
The only difference is the procedure to claim the capital loss, and timing of that capital loss, whether it is in the 2025/26 tax year, with the earliest possible surrender of BPS entitlements, or waiting to the end of BPS in 2029/30.
Any capital loss could be set against any capital gain in the tax year it arises. If there is no capital gain to set it off against in that tax year, then it can be carried forward to be set against any future capital gains, such as the disposal of an asset.
From a tax perspective, farmers need to consider whether it is worth electing for the new Sustainable Farming Scheme in order to crystallise capital losses in 2025/26. If they do not, then the capital losses will not be crystallised until 2029/30. Any capital losses can be set against any capital gains in the same or future tax years.
Nick Park is the Director of Cwmbran-based Accountants & Tax Advisors, Green & Co, and a member of the Country Landowners Association (CLA) National Taxation Committee.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wales Online
an hour ago
- Wales Online
The £10 million Welsh business park that still has no businesses in it
The £10 million Welsh business park that still has no businesses in it The site was completed in November of 2021 on land next to the A48 Brocastle Business Park in Bridgend (Image: John Myers) In a rural area near the Welsh town of Bridgend on the borders of the Vale of Glamorgan, there is currently a series of unused roads and pavements that lead to nowhere. Nestled between the M4 and A48, Brocastle Business Park was built to give an economic boost to the area, with the £10 million site funded by the Welsh Government with the aim of creating thousands of jobs. However, despite the numerous plots of land being ready and waiting to be filled by businesses, there is no hum of machinery or chatter of workers here at the moment, but instead an eerie silence as none of the land has yet been used. Brocastle Business Park was completed in November of 2021 on land next to the A48, around five miles away from junction 35 of the M4. It was built with Welsh Government funding to provide a 'substantial stimulus to employment opportunities' with outline planning consent for up to 770,000sq feet of floor space. The site is still hoped to bring in thousands of jobs to the area (Image: John Myers) Article continues below The works were carried out by a local civil engineering contractor and funded with more than £10 million from the Welsh Government, including around £6.2 million awarded through the European Regional Development Fund. An additional £2 million was also given to the project to link the new employment site to Waterton with an Active Travel Route. At the time of the opening, the then Minister for Economy Vaughan Gething said the 'significant investment' had been made for the plans that he hoped would lead to the creation of many new jobs. It was first completed in November 2021 (Image: John Myers) However, despite the completion of key roads and provision for nine plots at the site, as of August 2025, none appear to have been used with marketing agents still showing them as being available. Local Community Councillor Keith Hughes said he like others felt the area was still in need of more jobs adding that he hoped the investment at the site would eventually pay off. A response from Welsh Government said they were still confident that this would be the case, with negotiations on two of the plots currently taking place and others being 'actively marketed'. They said: 'Since substantial completion of the development plots, Brocastle has received a number of serious enquiries from interested parties. 'We are currently negotiating offers on two of the nine plots, one to a developer and one to an owner occupier. Article continues below ' The remaining plots continue to be actively marketed by commercial property agents and have been attracting steady interest. 'We remain confident that the site will attract further investment to Bridgend and be home to many new jobs in the coming years.' For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here
Daily Mail
7 hours ago
- Daily Mail
Profits plunge at C Hoare & Co, Britain's oldest bank
Britain's oldest private bank has seen profits slump and has warned Donald Trump's tariffs have left the outlook for the UK economy 'increasingly subdued'. C Hoare & Co, founded in 1672, posted a £63.7 million pre-tax profit for the year to March 2025, down from £80.8 million the year before, according to its most recent accounts. Total income fell to £249 million from £272 million. The bank blamed interest rates, which fell from 5.25 to 4.5 per cent in the period, meaning less money from loans, as well as its customers moving to 'higher-paying' sources of returns. It came despite total customer deposits at the bank rising 5.4 per cent to £6.4 billion and a 6.5 per cent rise in lending to £2.4 billion. Chairman Lord Macpherson, a former Permanent Secretary to the Treasury, said the coming year looked uncertain, as the UK had 'yet to break out of its low productivity-low growth cycle'. The bank said US tariffs had seen 'unprecedented disruption' to global trade and supply chains too and it was 'futile' to try to predict the final levies on imports. Based on Fleet Street, Hoare's is the world's oldest family-owned bank, with eight members of the Hoare lineage, including Venetia Hoare as partners. Clients include some of Britain's largest landowning families.
Auto Blog
9 hours ago
- Auto Blog
Ford's $30K Electric Pickup Could Crush Jeff Bezos-Backed Rival
One's better for towing, and one uses less fuel but which one's the better truck overall? The electric crossover segment is home to some of the industry's top rivalries, including that of the Hyundai Ioniq 5 and Ford Mustang Mach-E. With a targeted price tag of just $30,000, the new battery-electric pickup Ford Motor Co. announced this week promises good news for buyers looking for an all-electric truck that won't break the bank. Costing barely half as much as the typical EV sold in the U.S. this year, Ford is betting it will position the automaker as one of the leaders in the EV market. Source: Ford That could be bad news for another brand focused solely on the affordable EV segment, the Jeff Bezos-backed Slate Auto, which in April revealed its own electric pickup it currently expects to start delivering next year at a starting price of $27,000. While Slate would appear to have an advantage when it comes to cost, Ford's 'Universal EV' has lots going for it, with Sam Abuelsamid, chief analyst at Telemetry Research, declaring 'Slate is cooked.' Wanted: an Affordable EV Cadillac Escalade IQ — Source: Cadillac After surging eightfold between 2019 and 2023, EV sales have since lost much of their momentum, market share sliding to just 8.6% at the end of the first half of 2025, according to Cox Automotive data. Part of the problem is that early adopters have largely already gotten the vehicles they want. Further growth depends upon targeting more mainstream buyers. That isn't easy, however, when the average transaction price for an EV was $55,689 in July, according to Kelley Blue Book. For all new vehicles sold in the U.S. last month, the average, or ATP, was $48,401. Complicating matters: the $7,500 federal tax credit many EV customers depended on will go away at the end of the September due to the federal budget bill enacted last month. To kickstart the market, analysts widely agree, means bringing out more new EVs priced in the low $30,000 range, and even below that figure. Universal EV Rendering shows Ford's flexible EV platform which will first be used for a midsize electric pickup. — Source: Ford Ford says it's on track to get there thanks to the secret 'skunkworks' program it set up in Long Beach, California three years ago. A small product development team came up with what they're calling the 'Universal EV.' Echoing what happened when founder Henry Ford switched on his first moving assembly line in 1913, Ford is setting up a completely new manufacturing process at a plant in Louisville, Kentucky. The ultimate goal is to produce an extended family of low-price battery-electric vehicles. In 2027 that will begin with a 4-door pickup with a 'targeted price,' said Ford, of $30,000. Details have yet to be released but Kumar Galhotra, Ford's Chief Operating Officer, made it clear the truck won't be just an econobox. 'We do not believe that you need to strip out features, functionality, screens or even seats to make a vehicle affordable. We will achieve affordability by radically simplifying parts and process.' Slate Has Its Own Plan Slate Auto Skater — Source: Slate Auto Ford is by no means the only automaker feverishly working to shave EV prices. General Motors is readying an all-new version of the Chevrolet Bolt, its first long-range all-electric model set to debut this year. Kia has the EV4 coming, Nissan is finishing work on the next-generation Leaf and Tesla keeps promising its own entry model Then there's Slate Auto, based in the Detroit suburb of Troy. 'We are building the affordable vehicle that has long been promised but never delivered,' CEO Chris Barman said in April as she pulled the cover off an all-electric 2-door pickup. Slate Truck and SUV — Source: Slate Auto As with its more established rival, the Slate team poured over every aspect of automotive design, engineering and manufacturing. The truck's body will be made of unpainted gray polypropylene, rather than the normal steel or aluminum, for one thing. Unlike Ford's electric truck, meanwhile, the Slate model will be the ultimate example of stripping things down to their bare essentials. There'll be no radio, for example, and you'll have to supply the smartphone or tablet if you want an infotainment system. Even the windows will be hand-cranked. Who Has the Edge? 'I like simplifying things and making a lot of things optional for customers,' said analyst Abuelsamid, 'But they've gone too far.' He believes Slate yet may find some buyers looking for hyper-customization – with scores of aftermarket options available, including a cut to convert the pickup into a 2-door SUV. But Abuelsamid and other analysts Autoblog spoke to think most potential buyers will opt for the better-equipped, and only slightly more expensive Ford truck. Just the fact that it has two more doors should be a big plus at a time when 2-door products have all but vanished from the U.S. market. 'That does make Slate a much more difficult proposition,' added Stephanie Brinley, lead auto analyst with S&P Global Mobility. There Could be Surprises While Ford may seem better positioned, industry-watchers aren't ready to count Slate out. For one thing, it is expected to make it to market as much as a year ahead of Ford. And the start-up does have the backing of Amazon founder Jeff Bezos and other mega-investors who've so far filled the company's coffers to the tune of around $700 million, according to federal financial documentation. Ford Universal EV production line. But one also has to take the promises made by both companies with a healthy dose of skepticism, cautioned Brinley. 'How many times have we seen automakers set a price target but then end up coming in at $2,000, $3,000, even $5,000 more.' And it remains to be seen, she added, whether either company will meet its planned production date. That's a common problem across the auto industry and Tesla has shown that this is particularly problematic for start-ups. Ford, for its part, is confident it can deliver, and then gain a real leg up on its competitors in the bid to drive down EV prices. The number two U.S. manufacturer is particularly hopeful the Universal EV project will allow it to challenge the domestic Chinese automakers gaining so much traction around the world. Slate isn't ready to concede defeat. Far from it, the start-up automaker claiming to have so far recorded over 100,000 advance reservations for its truck. But there seems little doubt Ford has now changed the rules of the game in the emerging market for truly affordable EVs. About the Author Paul Eisenstein View Profile
