How should farming businesses react to the UK budget?

With the recent tax changes in the UK budget, there is talk that many family-owned farm businesses are looking to convert to limited company status. This isn't a decision to be taken lightly.

Part of the trade-off in transitioning to a limited company will be the need to adopt corporate governance standards. Directors of limited companies need to follow clear guidelines set out in legislation.

For a farming or land-owning business, this will include an obligation on directors to consider the company’s business relationships with suppliers, customers, and others, and to look at the impact of company operations on the community and the environment. These duties could open agriculture-based companies up to challenge - for instance, by pressure groups pushing a particular cause, or others concerned about the farming operations on company-owned land.

At L-EV8, we're used to the challenges that come with limited liability status. Our training and education sessions focus on the duties of directors and how they can ensure that they are meeting their legal responsibilities. Any farming business thinking of a change of status in response to the budget would be wise to look at the bigger picture, including how their liabilities may increase.