Spring Budget: Removal of ELMs tax barrier warmly welcomed
21st March 2024
Updates to environmental schemes that were announced in the Spring Budget have been welcomed by farming organisations.
In the Spring Budget 2024, HM Treasury shared the decision to remove the tax barrier for farmers engaged in Environmental Land Management schemes (ELMs).
The government has been exploring elements of the tax treatment of ecosystem service markets and environmental land management.
The existing scope of APR will be extended from 6th April 2025 to land managed under an environmental agreement with, or on behalf of, the UK government, devolved administrations, public bodies, local authorities, or approved responsible bodies.
Removing the barrier
NFU president Tom Bradshaw said: “We welcome the government backing the NFU’s call for the extension of APR to land in ELM schemes, as it will remove a barrier of entry for a number of farm businesses and give farmers more choice about how to use their land.
“But the extension of this beyond ELMs may have an adverse impact on food production and farm tenancies, and we will work with Treasury to assess those implications.”
However, it appears the relief will also apply to other environmental land use and could impact the level of productive farmland being removed from agricultural use.
It may also incentivise owners to take land out of farm business tenancies and private investors to purchase land to enter into environmental schemes. The NFU said it will look closely at any impact assessment.
Positive development
Phil Carson, head of policy at the Nature Friendly Farming Network (NFFN), called the government’s decision to remove the ELMs tax barrier “a sensible step in enabling the greater uptake of ambitious environmental delivery across the countryside”.
He added: “It helps to remove a barrier that would stand in the way of more multifunctional land use, which is capable of delivering a wider range of objectives.
“It helps farmers wishing to deliver long-term actions, such as biodiversity recovery, climate adaptation, and flood risk management, to invest in these actions with confidence that they will not be financially disadvantaged as a result.
“This positive development must be built upon through the creation of solutions which help secure long-term private investment in environmental delivery.”
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