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|HMRC's New Guide for Farmers Setting Up in Business - Strays into Financial Advice?|
HMRC has just announced an online guide for farmers at Starting in Business.
The guidance has apparently been drafted with the help of the National Farmers' Union (NFU) and on the whole is a decent and helpful guide aimed at people who are completely new to business and setting up in self-employment - although it's clearly a general guide with a bit of farmer-specific advice bolted on.
Note, however, the following:
Section 8 Forward Planning - Retirement
Although you may have just thought of starting your own business, it is never too early to plan for your retirement.
Advising us when you begin ensures you are registered for National Insurance contributions and that will entitle you to state benefits.
However to what extent these will be payable when you retire is unknown. The UK Government encourages all individuals to plan for their retirement and the earlier you start the better the final benefits.
Remember too that you can claim tax relief on any retirement provisions you make.
Whilst it might be sensible for people to plan for their retirement, there's an implication that the National Insurance contributions one makes throughout one's working life simply won't be up to the job - so what incentive to pay them? ("We're not saying they're worthless, just that they're worth less..?!)
And not all retirement provision is eligible for tax relief.
And are "advisers" not supposed to mention that the value of investments can go down as well as up, and that past performance is not an indicator of future yield..? (Well, they kind of have - at least when it comes to NICs!)
Interesting that at no point does the guide mention the possibility of setting up as a limited company. Because then some of the expenses mentioned in the guide as not being deductible might then be allowable. Furthermore, there's none of that apparently useless (or at least of doubtful utility) National Insurance to pay on dividend income. There may be many reasons why a corporate vehicle is not appropriate for some farming businesses but it should not be completely ignored.
That HMRC has made the effort to give useful advice is, on the whole, to be applauded. But that section on retirement just doesn't sit at all well in a tax guide.
About The Author
Lee is TaxationWeb's Articles & News Editor and writes for TaxationWeb. He is a Chartered Tax Adviser with experience of advising individuals and owner-managed businesses over a broad spectrum of tax matters.
Article Added Wednesday, 11 July 2012 | 1189 Hits