Adviser - Summer 2016

Adviser - Summer 2016

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www.scruttonbland.co.uk

Carving out a new chapter

Jewels of the East - Emily Mortimer Hendry talks about her stunning designs Land & Liabilities - things to consider when selling land for development A ‘Rosey’ summer ahead for Theatre in the Forest - Exclusive reader offer inside on p25

Beautiful gemstone jewellery that makes a statement

[email protected] | www.emilymortimer.co.uk | +44 (0)7525451753

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Whowe are

OUR PARTNERS

Scrutton Bland is a leading provider of accountancy, independent financial advice and insurance brokers to both business and private clients. Our philosophy is to offer clear, professional advice and to find the most effective solution to meet the individual needs of each client. We have regional offices in Ipswich, Colchester and Diss but also work with clients throughout the UK. Our specialist commercial business teams provide accountancy, tax, audit, insurance and business advice to owner-managed companies through to corporate operations. Our Private Client Service is tailored to providing IFA advice, tax guidance and wealth management services to private individuals. We are committed to delivering great client service and constantly strive to exceed the expectations of our clients providing a proactive and supportive service. If you would like advice on any of your business or personal affairs please contact one of our professional advisers who will be delighted to hear from you. 820 The Crescent Colchester Business Park, Colchester Essex CO4 9YQ 01206 838 400 Fitzroy House, Crown Street Ipswich, Suffolk IP1 3LG 01473 267 000

Tim O’Connor Managing Partner

Jason Fayers Tax Partner

TimMulley Senior Partner

Sharon Gravener Corporate Partner

Simon Pinion Business Advisory Partner

Sue Gull Corporate Partner

Tim Long Insurance Partner

www.scruttonbland.co.uk Merrick Hill, Victoria Road Diss, Norfolk IP22 4HZ 01379 643 444 www.merrickhill.co.uk

Nick Banks Business Advisory Partner

James Tucker Business Advisory Partner

@scruttonbland @SbliveOnline

Scrutton Bland

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WELCOME | S C R U T T O N B L A N D | S U M M E R 2 0 1 6 |

Elizabeth O’Hanlon Senior Marketing Executive

Erica Gilson Marketing & Business Development Director

Catherine Britton Marketing Communications Manager

Welcome to our new look Adviser Magazine. We are committed to continually improving our communications and hope that you will enjoy our fresh new design and the mix of business profiles, lifestyle articles and top tips that we have for you in our summer edition. I n this edition Adviser spoke to Phillip Ainsworth of the Suffolk Agricultural Association who gives us his view on some of the challenges facing the agricultural sector in the region and we profile farmer, James Foskett, looking at how investment in farming can pay dividends. Our cover story this season is the interesting account of traditional English firm Titchmarsh & Goodwin, who came close to the brink before pulling off a successful management buy out. Also in this magazine, we feature the theatre company Red Rose Chain’s ‘Theatre in the Forest’ sponsored by Scrutton Bland. Somewhat appropriately in the 400th year since Shakespeare’s death Red Rose will perform his last play, The Tempest . On pages 24 – 25 we look at what you should consider before choosing a charity or arts organisation to sponsor and announce a fantastic ticket offer for our readers. Finally we are delighted to feature up-and-coming jewellery designer Emily Mortimer Hendry whose beautiful designs are inspired by her childhood spent on her father’s farm in Suffolk (page 32). We have a jam-packed issue this summer and hope you will enjoy reading all of our stories and articles. We always welcome your feedback on our Scrutton Bland Adviser magazine, if you have any comments or suggestions for stories you would like to read about please let us know at [email protected]

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CONTENTS Who we are...............................................3 Building on our heritage.....................6 WherE there’s muck there’s brass. .........................................8 Inheritance Tax Planning: passing on your wealth.....................10 A Crystal Ball to Taxation?..............11 FROM PAIN TO GAIN: FARMFLO................12 Frankly they’re a model of business resilience........................14 Land and Liabilities...............................16 Delivering the Goods..........................18 10 TIPS FOR MANAGEMENT BUY OUT.....20 Get a grip with a SIPP...........................23 Red RosE Chain......................................25 Conference facilities on your doorstep. ..............................26 Protecting Your Flock: risk mitigation in the poultry sector .....................................................27 CARVING OUT A NEW CHAPTER..............28 JEWELS of the East...............................32 Christies Care: Success is in the family........................................................35 RECRUITING THE RIGHT STAFF................37 EACH: MAKING A DIFFERENCE.................39 A ROOM WITH A VIEW...............................42

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Building on our heritage

There is a palpable air of excitement at the headquarters of the Suffolk Agricultural Association (SAA) as the team plan for the main event in the region’s show calendar. But the SAA is about much more than the Suffolk Show. Adviser spoke to Phillip Ainsworth, the new SAA chief executive about the initiatives they are taking to promote and develop the region’s agricultural sector. Q. It’s well known that livestock farming is going through tough times – has this been reflected in entries for the Show this year? Q. We all remember a few years ago when the Show was cancelled because of the bad weather. What kind of planning can you to do to cope with this kind of thing? Q. You have previously talked about your determination to raise awareness of food and farming for young people. What plans do you have to develop this? 

A: Our livestock and equine entries continue to thrive, you only have to visit the show to see this with people coming from all over the UK to show their livestock.  Competing and winning at the Suffolk Show is a significant achievement; we also attract top quality judges.  The quality of our livestock exhibits are an intrinsic part of the show and a reason why so many people from the farming community and the general public keep coming to the Show.  This remains, and will always be, a very important area for us to support and develop.

A: We grow our education activities every year, for example, the School Farm and Country Fair is now in its 16th year.  So far about 50,000 Key Stage 2 pupils from schools right across the county have attended the event at Trinity Park which enables them to see at first hand where their food comes from and how it is produced. It can also help them begin to understand what a dynamic sector food and farming is and that it could open up many career possibilities to them in the future.  We also run a Potato Day, the Food and Farming Student Day and the Farming School of the Year competition.  These initiatives are so important because they inspire young people to look at food and farming in a different way. Food and farming is intrinsically linked to the economy and heritage of Suffolk and it’s very important that we play our part in raising awareness of this amongst young people. We also run the Trinity Park Conference and Event Centre which is an excellent conference and event venue. It’s important that we get the message across that when people choose to hold their event with us they are not only booking a quality event experience but also supporting all the good work we do as a charity to inform about food and farming, especially the work we do with young people.

A: We have a very experienced team in place who are well placed to plan every aspect of the Show; the attention to detail and precision of our planning is very important. The Suffolk Show is a major public event so safety of visitors has to be our top priority.  In 2012, it wasn’t a case of bad weather; it was a case of public safety due to exceptionally high winds so it was a unique set of circumstances which the public completely understood, as did all our exhibitors and sponsors.  What has been especially pleasing is how subsequent years have been so successful.  Planning for the next year’s Show begins the day after we finish this years event with a very thorough series of de-briefs where we examine every aspect of the Show and address any issues we need to consider for future years.  We also survey our visitors to look at how we can develop the visitor experience for them.

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Q. Some people have commented farmers in this region have largely escaped the worst of the recession. Last year prices were down but the good weather improved yields. What do you think will happen this year?  A: Agriculture, like many businesses, is affected by global influences linked to a number of different factors.  What does strike me is the resilience of the farming community and their entrepreneurship to develop new business opportunities.

Q. Do you think there is a problem with not enough new blood coming in to farming? The current generation of farmers are retiring, and it could be said that there are not enough successors coming in to take their place. What is SAA doing to address this?   A: Food and farming like any sector needs to attract young people to come into it.  The industry needs enthusiastic, entrepreneurial and confident young people and yes, I think it is very much about inspiring young people whilst they are in education as this is when they are making their career choices, whether they have been brought up in a farming environment or not.  The traditional image of agriculture has changed so much, you only have to visit the Show and see the wealth of high-technology on display to appreciate that.  Our education activities are very well known and play an important part in inspiring young people to consider careers in the sector.  We also work in partnership with others who are active in this field, for example Easton and Otley College; we have just partnered with them to launch the Suffolk Agricultural Apprentice of the Year Competition which will celebrate the achievements of young people pursuing a career in food and farming.

For more information on the Suffolk Agricultural Association see www.suffolkshow.co.uk Scrutton Bland have almost one hundred years of experience advising farmers, landowners and those working in rural industries regarding their insurance, accountancy, and taxation needs. If you would like to talk to us about your business contact us on 01473 267000 or 01206 838400 , or see our website www.scruttonbland.co.uk

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WherE there’s muck there’s brass Controlled expansion is the name of the game for any business wishing to improve productivity and there is no better example of this than Woodbridge farmer James Foskett . Adviser spoke to James about his recent investment in new buildings for storage, processing, workshop, chemicals, and new offices over the last year, investments which will create greater efficiencies and take his Suffolk based farm to the next level.

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A few of years ago it became apparent to James Foskett if he was going to keep up with his outgrown the existing buildings and staff welfare was becoming a primary concern as 15 tractor drivers and up to 30 staff were having to share limited facilities, some of them working up to 35 miles away from the farm. Although renting two satellite facilities helped with storage space and workshops, the distance between the main site and the overflow buildings meant that James could not control storage conditions as closely as was needed to ensure that he was getting the best from his harvested crops and he quickly recognised that to meet health and safety requirements he was going to have to expand his main site facilities. Completed in May 2016, the largest of these new units is a 1500 ton cold bulk onion store which proves invaluable twice a year, once with onion sets, then later in the year with maincrop onions. Investing in new building technology has allowed the site to become increasingly efficient in that the sheds can be used for different purposes at different times of year, for example the onion store can be used to dry cereals in a wet year. As with many farms, storage for crops like potatoes is a continual problem, but one which James has now helped solve by factoring a 1000 ton store into his new development, half of which is designed as cold box storage with blast chilling facilities, the other half has been designed as an accumulator store for seed potatoes. The former increases shelf life of the vegetable crops by taking the field heat out of the crop overnight before despatch to the customers, meaning potatoes harvested in the afternoon can be chilled down from 20°C to 3°C before leaving the yard. The latter part of the store with the accumulater system enables 500 tons of seed to be sealed in the store from November to April and have so many parts per million of ethanol released in to the atmosphere which makes the seed multisprout, fooling the seed into producing more tubers per hectare which is essential when growing valuable salad potatoes. Whilst this technology isn’t new (it’s been used for years to ripen green bananas as they are shipped from the Caribbean), the installation of new on-site facilities on his farm has allowed James to use the technology much more efficiently. The ‘store within a store’ creates a seal which prevents gasses being leaked when the doors are opened, as is the case within more traditional units. The development project has taken many months: there is no point, says James, in trying to cut corners. Whilst the contractors were on site for almost a year, the end results are impressive; not just the new farm buildings but the farm now benefits from new office facilities and even a dedicated meeting room which is necessary to create the right impression when meeting buyers from their main retail customers. It is not only his conventional enterprise that has reaped the rewards of his investment. James also has a sizeable organic component to the Deben Valley farm, and part of his development plan includes a building designed specifically as a packhouse for organic produce. This may sound straightforward enough, but with strict regulations surrounding organic produce production, the white-walled unit had to be properly ventilated and insulated to enable the business to pack food on site. He went even further with the addition of a canopy outside which enables his produce to be loaded in all weather conditions without unnecessary spoilage – providing increased efficiencies in the farm’s processes. James first began converting some land to organic chemical-free businesses growth that he was going to have to invest in the intensive vegetable business covering 2000 acres he farms in Suffolk. Volumes of production had

farming in 2007, a process that involved an entirely different crop management system to conventional farming. Currently there are three blocks of organic land including areas at Kirton, Martlesham and now the family Farm at Bromeswell is being converted. With a strict crop rotation system based on six or seven years between the same crops, James has to closely manage the cultivation of his potatoes, carrots, onions, sweetcorn, green beans, beetroot and butternut squash. Indeed, to meet organic standards at least 20% of the field acreage is in fertility building crops such as vetch and clover at any one time. And there is the small matter of hand weeding and hand harvesting, a process which requires a small army of up to 60 casual labourers who come to Suffolk each summer, many of whom return to the farm each year. Despite the recession in 2009 seeing the organic market almost collapse, and many producers going out of business, for James Foskett, maintaining an organic side to his farm has paid dividends. 2015 was his best organic year to date with 350,000 cobs of sweetcorn, 900,000 bunches of carrots and 120 tons of green beans, all handpicked and sent to supermarkets and veg box suppliers across the country. With the recent investment in the site, James is positive that his organic produce will continue to thrive to the extent he is now converting some of the family farm at Bromeswell to organic. As the main harvest on the Deben Valley farm remains potatoes, the introduction of the new storage facilities sees James anticipating an increased capacity for storing up to 4000 tons of potatoes and 5000 tons of green onions in cold store, thus improving cash flow which is not only music to James’ ears – but also those of his accountant. Another James, James Tucker , Business Advisory Partner at Scrutton Bland worked with James Foskett throughout the recent expansion and advises agricultural clients looking for the most efficient way to expand their businesses. “It is critical that farmers extract maximum value from their assets and understand exactly what the fixed cost base of their business is and what it is doing for them,” says James (Tucker). “Producers like James (Foskett) need to understand and react quickly to market forces, and it is my job, as a professional adviser to help them do that in the most effective way for the long term future of the business.” “I am thrilled to have had an input in helping James develop the farm, and I have no doubt that it is a business that will continue to go from strength to strength – it is a real good news story for the wider agricultural industry.” If you are thinking of expanding a business, no matter what your sector, it is important that you find a team of professional advisers who you can work with and who understand what it is that you are trying to achieve. This is something which James Foskett believes has helped in his recent project: “I really like working with proactive advisers” says James. “In my experience a good accountant doesn’t just ‘do the books’. Having worked with James Tucker, and previous Partners at the firm before him, I have become accustomed to being challenged and being asked by my accountant, ‘Have you tried this? Have you thought of that?’ Getting that outside view is imperative to helping anyone thinking of expanding their business like I did, to make the right decisions.” James Foskett Farms can be contacted at 01394 461130 www.jamesfoskettfarms.co.uk If you are thinking of expanding your business or looking for professional accounting advice James Tucker can be contacted at [email protected] or by calling our Ipswich office on 01473 267000 .

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As you progress through retirement is it not unusual to gradually become less active, particularly in your later years, and consequently to spend less. You may therefore move your focus from generating income to passing your wealth to your family as efficiently as possible. Inheritance Tax Planning passing on yourwealth Neil Hewitt Chartered & Certified Financial Planner at Scrutton Bland looks at some of the options for passing on your wealth.

I f your estate value on death exceeds £325,000 (£650,000 for a couple), the excess value will be liable to 40% Inheritance Tax (IHT) which can be a very significant reduction to the estate value passed to your beneficiaries. There will be an additional “Residential Nil Rate Band” introduced from 2017, initially at £100,000 increasing £175,000 by 2020. This will bring the total Nil Rate Band (NRB) up to £500,000 per individual (£1m per couple) but this will not apply to everyone. There are many ways in which this can be achieved, one of the simplest methods is to gift money or assets to those you wish to benefit. However, this is not as simple as it seems. Firstly, once gifted you no longer have access to that asset/cash or any income from it; you may not need the income at this point but you may need it in future years for say, care costs. Secondly, making a gift of an asset may incur a Capital Gains Tax (CGT) liability on you. Thirdly, even though you no longer have the asset you will need to survive for seven years from the date of the gift for its value to be excluded from your estate for IHT purposes. You can consider trust arrangements during your life, or via your wills. These can be a very effective way of passing capital and controlling how beneficiaries receive capital and in what order. However, they can also be complex and often do not avoid the IHT issues. You could instead consider a multitude of different IHT mitigation plans/investments each with varying degrees of access, control, income options and IHT effectiveness. These types of plans must be considered carefully to ensure that they suit your specific circumstances and needs. They could range from plans with no

access to the capital invested but ongoing income, to those with full access to capital. Investments with immediate reduction in IHT liability on part of the investment with the rest exempt after seven years to those that will be fully exempt after only two years - and the list of variations goes on. You may have an asset that you would like to shelter from IHT but to do so would mean suffering CGT on sale of that asset. There are investments that can defer/avoid CGT and gain IHT exemptions to meet this need. Such plans can also offer a variety of other tax benefits including Income Tax Relief, CGT benefits, loss relief and tax free incomes. The question is not really “is there a solution to my Inheritance Tax problem” but instead “which option(s) best suits my specific needs”. These solutions are highly specialised and it is important that you seek advice from a Chartered and/or Certified Financial Planner. If you would like to arrange an initial meeting, without obligation, please call on 01473 267000 or email [email protected] If you are interested in finding out about IHT planning, why not join us at our roadshows being held around Suffolk this year. Places are limited so please register with Karen Free on 01206 838400 or email [email protected] Scrutton Bland Limited is authorised and regulated by The Financial Conduct Authority

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Jason Fayers Tax Partner at Scrutton Bland looks into the future to identify some of the most significant tax changes which you may want to prepare for. A Crystal Ball to Taxation? A whole raft of new tax changes came into effect following March’s Budget. However, a notable aspect of the current Government’s approach to taxation is its enthusiasm to announce changes well in advance, and in some cases years ahead of their actual implementation.

APRIL 2020 Corporation Tax Rates

Here is a snapshot of some of the key tax changes which are due to come into effect over the coming years April 2017 Inheritance Tax nil rate band for residential property For deaths on or after 6 April 2017, an additional inheritance tax free allowance will be available in relation to property which has been an individual’s main residence and that is left to a direct descendant. The additional inheritance tax free allowance will also be available where an individual downsizes or ceases to own a home after 7 July 2015. The additional allowance will initially be set at £100,000 and will rise to £175,000 per person by tax year 2020/2021. However, the allowance will be restricted by £1 for every £2 by which a deceased person’s estate exceeds £2 million. Restriction of loan interest relief for individual residential landlords Private landlords will be unable to deduct their full interest costs on borrowings in calculating the taxable profits of their property business. The changes will be phased in over a four year period but by 2020/2021, relief will be restricted to basic rate tax relief on the entire interest costs. The basic rate relief on interest will be given as a tax reduction in the individual’s tax calculation for the year rather than as a deduction against the business profits.

Automatic UK domicile Non UK domiciled individuals will automatically be treated as UK domiciled for all tax purposes after they have been UK resident for 15 out of the past 20 tax years. In addition, individuals with a UK domicile at birth who have lived abroad for a number of years and who under general law have acquired a domicile in another country will be treated as UK domiciled if they resume residence in the UK. Corporation Tax Rates The rate of corporation tax which companies pay on their profits will be reduced from 20% to 19% with effect from 6 April 2017. Reform of loss relief rules The way in which companies can use losses will be relaxed. Company losses arising on or after 1 April 2017 will be available to be carried forward to set against different types of income and/or against the profits of other group companies. At present, companies can only offset losses which are carried forward against income from the same trade. In addition, losses can only currently be offset against profits of other group companies arising in the same tax year. Business, self employed people and landlords who keep their records digitally and provide regular digital updates to HMRC will be able to adopt pay as you go tax payments. The mechanism for how taxpayers will provide regular digital updates to HMRC has yet to be decided. However, the proposed changes represent a move away from the current annual tax payment deadline of 31 January and towards a method of tax payments much more closely aligned to receipts. APRIL 2018 Payment of Tax

Jason Fayers is a Tax Partner at Scrutton Bland and specialises in all aspects of business and corporate taxation. [email protected] call 01206 838 400 and building a relationship with him or her well in advance of any changes being implemented allows your adviser time to prepare and identify the right solution for your individual needs. The rate of corporation tax which companies pay on their profits will be reduced further to 17%. In addition to all of the above tax changes, there are a number of ongoing government consultations in place which may herald much more fundamental changes to the UK tax system. These include a review of the way in which small companies are taxed so that such companies are looked-through and tax is imposed directly on the individual shareholders. There is also the possibility of some revisions being made to the planned changes before they are implemented. However, the announcements do at least allow time for people to prepare for those changes and if necessary to re-structure their affairs. What should you do if you think any of these changes could affect you? Getting the right advice early is critical to finding the right solution for any aspect of tax planning, whilst this might sound like common sense, it is important that you work with a tax adviser who understands your tax affairs and what you are trying to achieve. Finding an adviser you can trust

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“I love farming, but I cannot say the same about the paperwork”, Kevin Nolan, ‘Farmer of the Year’ and ‘Tillage Farmer of the Year’ Ireland, 2014. “Paperwork for my farmmanagement, customers’ requirements and compliance records is essential. When I discovered Farmflo software I was simply delighted. I spent a while setting up all my farm enterprise details online at Farmflo before downloading the smartphone app for day to day record keeping. My administration headache time is down by 90% and my records are accurate and up to date, allowing me to concentrate on my core business of farming. I’d recommend Farmflo to every farmer serious about saving time and improving their farm record keeping.” FROM PAIN TO GAIN Farming compliance made easy

KEVIN NOLAN

Adviser spoke to Farmflo’s new CEO Dan O’Donoghue about their leading edge software developed specifically with farmers in mind. Adviser: Farmflo has been getting a fair bit of coverage lately, what exactly is it? Dan: Farmflo is an easy to set up and use, cloud based, paper-less software package specifically created to improve farm management, compliance and customer traceability records. Farmflo can provide farmers and those professionals who they work in partnership with, such as agronomists, with paperless connectivity to ensure better farm management along with accuracy in compliance and traceability. Adviser: You have joined the company at an exciting time, how is the business going? We have seen fantastic growth in interest from all segments and mixed enterprises. Our aim is to make Farmflo the software of choice for the Agricultural sector, indeed one of Ireland’s leading Farmers’ Co-ops have recently selected us to replace the market leader. Recently we were appointed by Boortmalt, one of the top five malting businesses globally by volume. We now supply the software for their Irish agronomist team and they use Farmflo as their >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44

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