In the news

Entire reason for privatisation was for private sector to fund badly needed infrastructure investment.

If you believe that, you'll believe anything. It was always intended to be a racket.

Ok, the reason that was given to the public for privatisation.

ICC finally issues warrant for arrest of Netanyahu and Gallant (for war crimes and crimes against humanity).

https://news.sky.com/story/arrest-warrants-issued-for-israeli-pm-netanyahu-and-former-defence-secretary-gallant-over-alleged-war-crimes-13257801

• Bribing the public by offering shares at an undervalued price
  
• Offloading responsiblity for essential services (AI is now a popular gimmick for the same "offloading responsibility" con)
  
• Lunatic Thatcherite ideology
  

I double checked, and it's "Farm Business Income". I couldn't easily find that defined online, other than here. It says it is similar to net profit, so my takeaway that this figure is post-tax.

You're right that there's a load of things a farmer could include in their business expenses that others could not. They own their housing outright, and would purchase all vehicles via the business. Don't get me wrong, 45k per year for a family in that situation isn't poverty line, but it's also not balling. Obviously the average as a statistical measure hides a lot, so there will be plenty who are poverty line, and plenty who are balling.

Haha yep, I think I've fallen the wrong side of the cunt-o-meter here! I had perhaps naively thought that this forum of people who either actively or at one time did enjoy being outdoors cycling where others tend to favour being indoors might have some sympathy with another slice of society who also enjoy being outdoors where others tend to favour being indoors. I'm guessing the London-centric nature of the forum means many have often experienced farming in ways which conflicts with their own hobby.

Just to check, is that post-tax? Because otherwise a profit of £45k ≠ household income of £45k.

I assume that utility bills go in as a business cost, as will transport. House is a farm asset. Computers, phones etc are prob business cost. So after all that and tax it's £3750 a month.

For a salaried person to have £3750 after all that they would maybe need £5.5k a month net. About £95kpa.

Quibbling over the numbers etc is welcome

That average is prob skewed by the big earning farms with the median likely lower. But the income is likely in some way correlated to the value of the farm therefore I wouldn't really expect those on the median profit to be paying iht. I wonder what the median income for farms worth over £1m and £3m is.

The venn diagram of those who have to pay but can't afford it may be pretty small.

I mean this is my takeaway.

And again you have mitigation strategies. So the breakdown of those who can't afford it, haven't had some sort of insurance in place, and can't secure debt at an affordable rate to manage the payments must be tiny.

As a group of people farmers are very up on various revenue streams and information, so I'd be surprised if many if any were caught unaware.

About £95kpa.

This is basically what I was thinking. I still don't think that is an amazing equivalent household salary all told - when you think of the effort, risk and physical toll.

But it's also not quite the same as £45k per household. While potentially (depending on ownership) also having something that you could sell.

I had perhaps naively thought that this forum of people who either actively or at one time did enjoy being outdoors cycling where others tend to favour being indoors might have some sympathy with another slice of society who also enjoy being outdoors where others tend to favour being indoors.

This is a weird thing. Like thinking this forum would have sympathy with car drivers because they use the roads too.
I don't think anyone has been particularly anti farmer anyway, just pointing out that this policy also isn't anti farmer, it's anti inheritance tax breaks for people using farm land to avoid inheritance tax. Maybe it needs tweaking but it's not a bad idea as far as I can tell as someone who lives in the north but grew up outside London down south but reasonably farm adjacent.

Yeah, I agree. I did try and find the raw data to take a peek at that, but I couldn't easily find it. It sounds the Farm Business Survey and DEFRA surveys are the main source of data for this.

I worry that even if I were able to get the raw data it might not be all that useful, though. Everything I read online says that farms with a standard output of less than 25k EUR are excluded from the data. I don't know for sure, but it feels like there's probably lots of farms in a given year operating at a loss or a tiny profit, given the nature of the business.

As you point out, excluding those lowest profit farms will further skew the average.

If you have some farm land that can't be built on but doesn't make much profit each year, why is it valued so high?

Because you can pass it on without taxes...oh.

Hang on, actually maybe the new tax will lower the land values to the extent that even fewer farms will meet the threshold?

So is it the iht exemption that is killing the culture of farming families then? How many hight value farms have passed from framing families to novice farmers in the last 2 decades? Would these novice farmers have bought the farms otherwise? Do they farm that land? Will their kids farm that land? Do they have tennent farmers on the land? Would those tennent farmers have been able to afford some land if the novice farmers hadn't bought it?

Chorley bread process (quick fluffy bread) was the 60s.

That is what I have been saying.

In all of these situations where tax gets increased, people put forward this argument, but there's no obvious metric or cut-off for "can't afford it." If something gets more expensive for everyone then a small number of people will literally be unable to buy it without going into the red, but there will be a larger group of people who will have to use money that they'd earmarked for something else they wanted. A fair proportion of those will decide that it's too much of a strain on their lifestyle so they'll just not buy/invest in the original thing.

Ultimately taxing anything will make it less affordable so you have to have higher income/wealth to afford it than before. With farming the link seems fairly direct, since your ability to pay the tax is directly linked to the profitability of the thing that's being taxed. I think that the argument that this change will reduce tax avoidance and therefore reduce land values is a good, positive one, but I've still yet to see much engagement with the other obvious consequence i.e. that it will become harder to turn a profit on a farm that you've inherited, and what that means for the sector.

You would have thought that if Labour had been a bit more savvy they would have announced this tax change (aimed at preventing high rollers who are aiming to avoid inheritance tax) along with some measures to help increase profitability of working farms. Probably been suggested already, but Labour just aren't very good at the politics and messaging bit of government at the moment.

But this is exactly what the did isn't it, 5bn support over two years

that it will become harder to turn a profit on a farm that you've inherited, and what that means for the sector.

What do you think it will mean?

Entire reason for privatisation was for private sector to fund badly needed infrastructure investment.

Northumbrian Water invested in Kielder Water and lots of sewage works and pumping stations pre privatisation.
It was also researching different methods of sewage treatment and sludge disposal. My Dad was once the European expert on burning shit….

I think that some family farms will go under and that some will downsize. Where the land from the sale of those farms goes is another question.

What do you think the effect on the farming sector will be?

In general I've just found it quite odd how many people, who I think have a deep and subtle understanding of macroeconomics, have responded to the Labour budget (and other financial announcements) without questioning the underlying assumption that our national economy needs to be treated like a household budget i.e., that we need to tax the shit out of everything before investing in anything.

this is massive: will it be massive? can only hope

treated like a household budget i.e., that we need to tax the shit out of everything

I rarely tax anything.