The Courier & Advertiser (Fife Edition)
Accounting for a time of change
The Farming Scotland conference takes place in Carnoustie Golf & Spa hotel next Thursday. It will be chaired by Graeme Davidson, a partner with EQ, a provider of accountancy, taxation and business advice. David Andrews finds out how he views the conferenc
Q— What is the purpose of the Farming Scotland conference?
a — The original idea was to bring together the local farming community and professionals working in that sector.
The conference allows them the opportunity to hear speakers from outwith the area covering topics that you do not necessarily hear local speakers talking about.
Q— You always seem to have a good mix of speakers, with high-profile farming politicians alongside practical farmers talking of their own businesses.
a — Yes. In addition to getting updates on the latest moves on farm policies, part of the conference has always been to hear practical farmers who are successful by doing something different in terms of their approach or activity on their farm.
The idea is to inspire new ideas and generally precipitate enthusiasm and initiative.
Q — Farming is on the cusp of a major sea change with the next Common Agricultural Policy coming in next year. Will that form part of the conference?
a — In addition to Jeremy Moody, who is reckoned to be one of the top experts on the CAP, all four speakers will allude to “change” in some shape or form.
The conference is titled Sowing the Seeds of Change as there are other potential changes such as land reform and the referendum later in the year which could both bring significant change for us all.
And that is before we look at how practical farmers are making fairly major changes in their own businesses.
Q — So how do accountants cope with all this change so they can guide their clients through it?
“The idea is to inspire new ideas and generally precipitate enthusiasm and initiative.” Graeme Davidson
a — In a lot of cases, clients leave it for us to hold their hand through change and guide them along the path where there have been changes in tax legislation or changes from a practical point of view to their businesses.
Q — You’ve mentioned a number of areas of change. Change normally equals uncertainty, and that is often bad for business, isn’t it?
a — Uncertainty isn’t a good thing. But change should also mean opportunity, and I think that is the mind-set that we try to instil among those who are going to the conference.
Hopefully that is how the delegates will go away feeling. The speakers have positive stories to tell.
Q — Looking at CAP, for example, do you see this bringing major change to farming industry in this area?
a — Yes, I think it will. It will once again focus the minds of farmers on their bottom line and where that is derived from, and in many cases put pressure on that because there will be a redistribution of the CAP from the Single Farm Payment pot.
There will be winners and losers, and those who are losers will have to look at how they replace that income.
Q — Who will the winners be, or are there going to be any? Nobody seems to be a winner yet.
a— Well, I think it remains to be seen who the winners are. But I suppose by definition if there is a pot which is to be redistributed then there’s potential for winners.
Q — Put it another way, your business operates in a very intensive, high-level farming area, and yet every indication
is the money will move up into the less productive land.
a — Absolutely, but we have clients who farm in both categories, and amongst that there will be winners and losers. There is no question about that.
Q — Moving to legislation relating to land holdings which is currently under review, do you see potential problems there?
a — You alluded to any change giving uncertainty, and that in itself brings along its own issues.
I think the uncertainty and the anxiety this causes is the problem, not what the end result might be.
Who knows what the outcome will be and whether it will be as dramatic as some would have us believe?
My personal view is that the review recommendations will not be as dramatic as some would have us believe, and the actual impact on the operations of most farmers won’t be significant.
Q — There are also major changes coming along in taxation. What are the issues?
a — There are changes to partnership tax as a result of draft legislation which was announced just after the Autumn Statement in December.
These changes mean we are looking at the business structures of a lot of farming family partnerships, and there will be a lot of cases where their business structure will have to change. That is taking up a fair degree of our time at present.
The changes come in from this April, so for the next two or three months we will be reviewing the clients who are affected and coming up with solutions for them.
Q — In general terms, is taxation becoming more complex?
a — Yes. I think every successive Finance Bill has more pages than the last. Tax legislation has probably never been so complicated.
Counter to that there is a review body called the Office of Tax Simplification, which is looking at various aspects of the UK tax regime to see where it can be simplified — but their recommendations have not been implemented as yet.
Q — What attracted you into this profession?
a —I suppose the general field of accountancy and tax seemed to draw together the academic areas that I was strong at through school. But I very quickly realised that a large part of being an accountant and tax adviser is being able to speak to people and be interested in what they are doing.
Speaking to individual clients, getting to know them, their business and their family and being able to give them relevant advice on the back of their circumstances is very satisfying.
Q — If there’s one part of the job you’d change, what would it be?
a— It would be the level of complexity of the tax legislation. By that I mean constant tinkering around the edges of it.
Obviously changes to tax legislation often offer opportunities for us to do clever things or provide advice to clients. It’s not that I object to; it is the tinkering around the edges for what appears to be no better reason than change for the sake of change.