Industry specialists
Accountants for Farmers & Agriculture
At a glance
- Farmers' averaging: elect to average profits over 2 or 5 years — a major tax saver when good and bad harvests alternate across tax bands
- Herd basis: production herds (dairy cows, breeding ewes) can be treated as a capital asset — an election with long-term consequences
- Inheritance tax: from April 2026, 100% agricultural and business property relief is capped at £1m combined per person, with 50% relief above it
- Diversification income — glamping, solar leases, farm shops, weddings — is usually taxed as separate trades or property income, not farming
- Typical fees: family farm partnerships commonly £83–£227+/month on our benchmarks, reflecting stock valuations and multiple enterprises
Averaging and the herd basis: the two farming-only levers
A farmer earning £20,000 one year and £80,000 the next pays more tax than one earning £50,000 twice — unless profits are averaged. The two- and five-year averaging elections exist precisely for this, and choosing the right window each year is genuine skill. The herd basis election separately turns your production herd into something closer to a capital asset: replacement animals become deductible costs, and a whole-herd disposal can escape income tax entirely. Both elections have deadlines and long tails — exactly what a farm specialist tracks.
The 2026 inheritance tax change every farming family is discussing
From April 2026, the combined 100% relief for agricultural and business property is capped at £1m per person, with 50% relief beyond it — meaning many working farms face inheritance tax for the first time. Responses being planned now include lifetime transfers, restructured partnerships bringing the next generation in, and insurance against the liability. This is specialist territory where the accountant and land agent work together; a generalist filing your return isn't doing this thinking.
Diversification muddies everything
The wedding barn, the solar lease, the glamping field, the farm shop — each is likely a separate trade or property business with its own VAT treatment (some standard-rated where farming is mostly zero-rated), its own loss rules, and consequences for those inheritance reliefs, since non-farming use erodes agricultural relief. Farm accountants map each enterprise separately so reliefs survive and VAT stays right.
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Accountants & auditors in York · established 2009
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Hidderley's Farm Bookkeeping Limited
Stoke-on-Trent
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Bookkeeping services in Stoke-on-Trent · established 2021
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Frequently asked questions
Can I still use the VAT flat rate scheme for farmers?
The Agricultural Flat Rate Scheme lets qualifying farmers charge a 4% flat-rate addition instead of VAT registration — worthwhile for some smaller farms selling to VAT-registered buyers, but usually beaten by standard registration once input VAT on machinery and contracting is significant. Worth modelling both.
How are Basic Payment / delinked payments and grants taxed?
Delinked payments and most agri-environment scheme income (SFI, Countryside Stewardship) are taxable farming income; capital grants generally reduce the cost of the asset instead. Lump-sum exit payments had their own capital treatment — timing matters, so tell your accountant before signing scheme agreements.
Should the farm be a partnership or a company?
Most family farms stay partnerships — flexible profit shares, simpler land ownership, and better inheritance-relief interaction. Companies suit some intensive or diversified operations. Post-2026 IHT rules are shifting this calculus family by family; get bespoke advice.
Information only — not tax, accountancy, or financial advice. Rules and thresholds change; confirm current positions with GOV.UK or a qualified accountant. Last reviewed: 2026-07-09.