What's a fair wage on a family farm?

[Brisel]

My brother and I (both directors of our livestock farm, but not ownerd by us) in our 30s work on our family farm usually 50+ hours, probably take a week to 10 days holiday a year (I know this is not unusual in this industry). Our housing is provided by the farm, but can hardly be classed as elaborate, we pay ourselves £8k/year (and have been for the last 10 years). I've been looking at our accounts and in theory we could probably afford to increase this to £16k ea, but this would probably be at the expense of investment needed (new barn, replace worn out machinery etc etc) as our profits would only be £10-15k based on last years costs/sales.

I'm very much minded towards a pay rise as I'm finding my pay whilst adequate a decade ago is not enough to afford the basics and have money for savings, but the rest of the family are reluctant. I have suggested we look for ways to improve profitability, but am met with deaf ears at best and positive hostility towards some diversification plans. Is it reasonable to expect more (as a uni grad) from this industry?

Will the family discuss succession planning, IHT planning etc? If not, get out and double/triple your salary elsewhere.

Apart from your brother, who else actually works on the farm?

 

[Bossfarmer]

Oh! It then depends on what bills are paid. If it is tidy car and fuel and everything else apart from food and clothes it may be OK. It also depends on who pays the income tax, if any.
Every farm business is structured differently. Many seemingly well run businesses make a complete hash of their family affairs one way or another.

The real benchmark must be the wage of a skilled farm worker, like a full time cowman. I reckon most really good ones earn around £35,000 a year before tax, give or take £5k depending on all kinds of things including hours and responsibility. No house in that. The elephant in the room is what does the farmer's son get out of it eventually and on what timescale and with what certainty for the reduced cash earnings over many years.

If there is no certainty of anything but a ''thank you and goodbye, it all goes to the dog sanctuary", then best to get out sooner rather than later.

surely in no situation will it end up in a dog sanctuary?? the kids will get it eventually whether they've worked or not

 

[Cowabunga]

surely in no situation will it end up in a dog sanctuary?? the kids will get it eventually whether they've worked or not

woman-mothers-will-loses-money-animal-charities-a7632196.html

 

[J 1177]

are you not concerned about the government removing inheritance tax relief on farmland?

Yes but if we switch it over now and my old man doesnt live another seven years il be hit then.

 

[chaffcutter]

^^^^^^^^@Bossfarmer - as if we all haven't got enough to worry about already !
I have found so far (in nearly 70 years) that all you can do is adapt your strategy as the rules and so on change. Trying to second guess the future is an idiots game imo

 

[Bossfarmer]

Yes but if we switch it over now and my old man doesnt live another seven years il be hit then.

Thats a fair point theres bound to be a few older farmers in that situation as their parents will be pensioners!

 

[worker]

Yes but if we switch it over now and my old man doesnt live another seven years il be hit then.

Are you not a farmer then?

 

[flyonthewall]

Will the family discuss succession planning, IHT planning etc? If not, get out and double/triple your salary elsewhere.

Apart from your brother, who else actually works on the farm?

Not really, seems somewhat of a taboo subject on IHT (it does need sorting), other than my mother we have a full time butcher and a part time bookkeeper. To be honest I'm somewhat hacked off by the whole situation, low income, being on site 24/7 and expected to deal with any eventuality and not knowing if the place is going for the local donkey sanctuary, but I guess this is the norm in stock farming........ Not to mention being in the firing line because of a dozy accountant not reconciling VAT returns with company accounts (that's another story and a lesson for me). Need to change!

 

[J 1177]

Are you not a farmer then?

??. The situation im led to belive by our accountant is that id be hammered by iht if it was handed over now and the old fella dies within 7 yrs. My old man wanted to give me half the farm.

 

[J 1177]

Thats a fair point theres bound to be a few older farmers in that situation as their parents will be pensioners!

Im only 33 but hes 70 with parkinsons

 

[gone up the hill]

??. The situation im led to belive by our accountant is that id be hammered by iht if it was handed over now and the old fella dies within 7 yrs. My old man wanted to give me half the farm.

Given his ill health then I would think the best situation would be for him to remain owner/ the farmer until ( well I don't need to write that ) happens as 7 years is a long time ( thou nothing when you are fit and healthy )

 

[J 1177]

Given his ill health then I would think the best situation would be for him to remain owner/ the farmer until ( well I don't need to write that ) happens as 7 years is a long time ( thou nothing when you are fit and healthy )

Yep we thought that. Not really talked about it as such but we all know he would be better of without the parkinsons.

 

[FDA]

Oh! It then depends on what bills are paid. If it is tidy car and fuel and everything else apart from food and clothes it may be OK. It also depends on who pays the income tax, if any.
Every farm business is structured differently. Many seemingly well run businesses make a complete hash of their family affairs one way or another.

The real benchmark must be the wage of a skilled farm worker, like a full time cowman. I reckon most really good ones earn around £35,000 a year before tax, give or take £5k depending on all kinds of things including hours and responsibility. No house in that. The elephant in the room is what does the farmer's son get out of it eventually and on what timescale and with what certainty for the reduced cash earnings over many years.

If there is no certainty of anything but a ''thank you and goodbye, it all goes to the dog sanctuary", then best to get out sooner rather than later.

 

[FDA]

Please whatever you do get the inheritance and/or succession sorted out early doors. If needs be have a review of any arrangements every year or so. I am in the midst of explaining to my 80 year old father why it might be time for him to bow out of the partnership, I genuinely think that this will end any relationship between the family and myself and my wife. All ruined because me and the old man were too gutless or reticent to get it sorted years ago.

 

[worker]

??. The situation im led to belive by our accountant is that id be hammered by iht if it was handed over now and the old fella dies within 7 yrs. My old man wanted to give me half the farm.

If i were you i would check his advice, if you are still using the land to farm on the date of his death APR should still be available. Every situation is different but i would check it out, perhaps ask your solicitor as a second opinion...

 

[bankrupt]

Every situation is different

The common factor seems to be that everyone now needs to be able to show very clearly that they are still actively farming at their death, downsizing, divestment, retirement, demerger, divorce, disincorporation or incorporation, birth even.

As to getting more advice, what's a few hours at £300/hr spread over half a lifetime?