Tax? Is it all the wrong way round?

[Tim W]

Here’s an interesting one, got me thinking a bit----whilst at the ORFC I heard Henry Gent argue that the tax system was skewed in favour of large mono-culture cropping enterprises and against labour intensive mixed farming systems

So farmers get red diesel at a reduced rate of 75p/l (?) , reactive Nitrogen is also not taxed---this encourages & subsidises high input agricultural systems
Whereas a farmer who creates jobs ,say a veg grower or someone hand weeding has to pay lots of tax on the employees wages

An intensive dairy farmer, zero grazing & using lots of fossil fuels to bring food to his cattle (from his silage fields or from further afield ) will not be taxed on the red diesel and nitrogen inputs whereas the man who grazes his cows 11 months of the year will pay tax on his workers who bring the cows in for milking etc

So is this the right approach?

Should we be encouraging farmers to employ more people by reducing the taxes on earnings and taxing inputs such as nitrogen and diesel ?
This way will we keep more cash going round in the local economy and encourage lower input /more ‘sustainable’ farming practices?

 

[yellow belly]

we would need even more imported labour in farming

when I worked in the cropping fields of lincolnshire as a student the labour was exclusively local white English now most is non English imported

less than 20 litres per acre for arable farming tax fertiliser and production will fall
bigger tractors use less fuel per acre than small tractors and the labour is halved or more

 

[Wooly]

You need to get some more sheep Tim, suddenly thinking of Tax affairs!

Why stop there; the tax man gives 100% tax write off for machinery and plant (most of which is made abroad), but doesn't give any tax advantages for erecting new buildings that are mostly made in the UK and built by British workers.

 

[Devil's advocate]

You need to get some more sheep Tim, suddenly thinking of Tax affairs!

Why stop there; the tax man gives 100% tax write off for machinery and plant (most of which is made abroad), but doesn't give any tax advantages for erecting new buildings that are mostly made in the UK and built by British workers.

It does gripe me that as a 40% tax payer. I've contributed to all the 40% subsidies on many large super market growers pack houses to grade veg to silly standards, then I'm not elligble for these grants because I don't have a super market contract. Reading the Vegetable Grower this week, one of Tesco's largest suppliers was 26 million quid in debt, is that sustainable?

 

[Devil's advocate]

we would need even more imported labour in farming

when I worked in the cropping fields of lincolnshire as a student the labour was exclusively local white English now most is non English imported

less than 20 litres per acre for arable farming tax fertiliser and production will fall
bigger tractors use less fuel per acre than small tractors and the labour is halved or more

A few changes to tax & welfare payments would help change that situation. More of an incentive to work.

As for bigger tractors using less fuel, depends on field size & types of cropping. We are happy at 85hp & try to buy all implements to use that power, yes at times we would like more power, but just work a little longer. I'm sure that is the most economical way to do it.

 

[Goweresque]

All employers NI contributions are 100% allowable against taxable income ie they are an allowable business expense, as are the gross wages. Thus although some of the wage expense goes to the government, and some to the employee, its the same as if there was no employers NI and the employee got the lot. So in fact labour is not taxed in your business any more than machinery is.

And if employers NI contributions were abolished the extra money would, over time, result in higher wages for workers, as the tax incidence of employers NI is generally considered to fall on the worker. That is to say when you consider employing someone you work out the gross cost to you (gross wages plus employers NI contributions) and work back to arrive at a salary you are prepared to offer. So if you can afford £25k all in, you offer a salary of c. £22k, and your employers NI contributions would round it up to £25k. Thus if there was no employers NI you would probably offer £25k to start with, as all other employers would be in the same position, and you'd be competing with them for employees.

 

[RushesToo]

You have to start with the tax system you have. If you change it radically you destroy the economy.
This means that Governments can only nudge tax systems in the direction that they want to go, they keep doing this till they fall from power.

If you return new Governments and policies every 4 years, you end up with a mess that is almost unentagleable.

The only place you find strategies that last more than 10-15 years are in large corporations that have stable shareholdings, see Berkshire Hathaway/Warren Buffet and Toyota corp.

Change is only every evolutionary and often not to achieve the aim but undo what someone else has done.

 

[Big Al]

A few changes to tax & welfare payments would help change that situation. More of an incentive to work.

Will anyone be willing to employ them though, I reckon anyone who has employed eastern Europeans with their strong work ethic would be fairly reluctant to start taking on large numbers of long term unemployed Brits in jobs like veg picking.

 

[Forever Fendt]

Will anyone be willing to employ them though, I reckon anyone who has employed eastern Europeans with their strong work ethic would be fairly reluctant to start taking on large numbers of long term unemployed Brits in jobs like veg picking.

i think the reluctance is the long term unemployed to work rather than the employer to take them on