Poole on Farming

I have, today, signed a contract for a book ‘Poole on Farming’. To me this is the most interesting and important trade of all, and the nexus between community, wildlife, landscape and food make this critical now as we face disruptive changes to our society from many directions.

The economics of farming and landed estates is changing with the evolution of farm payments, new opportunities for utilising and offsetting Natural Capital and Carbon along with new Biodiversity Net Gain rules in the Environment Act 2021. All of these will be surveyed in detail with thoughts about how these can be applied on landscape level by landowners and farmers working together.

By its nature, farming has a strong community rooted in the soil. It is one of the few trades where people work together across businesses, whether by partnership, contract farming arrangements, shared assets or infrastructure through formal cooperative structures like those provided by the Cooperative and Community Benefit Society Act 2014. I will be giving detailed instruction about all these together with pro-forma documents.

And of course all the special tax and accounting rules which I am sure you expect from me – averaging, herd basis, losses, capital allowances, VAT, and how capital gains tax, inheritance taxes work in the most common transactions with detailed guidance.

There will be thoughts on incorporation with all the advantages and disadvantages that a company can bring. Yes to R & D and land remediation relief, but what about ATED and benefits in kind. And that burning question: should the land go in?

And finally looking at various ways to diversify the use of the land and what impact this has on the business structure.

Get ready for publication in early to mid 2023.

And yes, I did pick up Oliver Rackham’s seminal work for 50p!

Fog starting to clear

A personal perspective by Stephen Poole

This is a photograph I took in Madeira a few years ago watching the sun rise having spent the night strapped to the mountain carefully watching Zino’s Petrels roost. This was a life changing moment for me, but I think we are at such a moment now as regards management of land in the UK.

The following comments relate to England only. Scotland, Wales and Northern Ireland have their own systems. I have also left out considerations relating to Brexit.

For those involved in farming and land management, things are starting to resolve, but we are not fully home yet. I like to think of land management as being a combination of three different disciplines, all of which no one person can be expert at. This means that to succeed in this there must be a team effort between different disciplines. To me the areas are as follows:

  • Looking after land for wildlife and human recreation
  • The economics of ownership of the land, with the necessity to raise enough income to be able to make a living and look after it
  • The impact of various different taxes on the landowner and activities carried on their land

I put myself as expert in the last category, and I dabble in the second category. I fall woefully short however in the first category, and therefore it is always a pleasure to work with knowledgeable ecologists, wildlife experts and historians. So many pleasant hours have been spent talking into the night about the potential chaos that beavers can wreak compared to the proven benefits . . .

I think as a country we are starting to get a better grip on the way to manage land for wildlife and for the environment more generally, and it looks like good progress is being made on Gove’s popular 25 year plan.

The economics of land management

On the economic side, the erosion of the basic payment as set out in the agricultural transition plan last November is a concern. It was very interesting therefore to see the Sustainable Farming Incentive in England stepping in for what was tier 1 under the original ELMS scheme, and what pleased me about this was that specific rates per hectare were given for specific activities. The farmer will not have to start with a plan, but will develop a plan along with DEFRA. I thought this was a very good approach and accordingly I telephoned all my farming clients to tell them to get within the scheme by the deadline of the 11th of April just gone. To me this looked almost like free money for the farmer.

Tier two of ELMS has been renamed to the Local Nature Recovery, and Tier three has been renamed to Landscape Recovery. Everyone advising farmers whether you be accountant, lawyer or land agent should have a good knowledge of the agricultural transition plan published in November 2020.

In addition to all this we have the potential advantage of Biodiversity Net Gain offset payments under section 106 of the Town and Country Planning Act, but soon to be under the Environment Act once it passes through Parliament, probably later this year. I am starting to see deals valued at around about £12,000 per unit of biodiversity, but the sticking point is going to be the need to enter into a 30 year agreement to maintain such biodiversity once the payment is received.

There are many other schemes and sources of money for landowners to tap into including the woodland carbon code and local water authorities. I think the best place to start here is with the local wildlife trusts and local river trusts who will know what the local priorities and incentives are.

Taxation – a few thoughts

The taxation of land has been under some doubt in the last few years, as the taxation of trusts has been under review for a long time, and there has been of uncertainty on corporation tax rates. The government announced in its ‘Command Paper’ of 23 March 2021 that ‘the responses did not indicate a desire for a comprehensive reform of trust tax at this stage. The government will keep the issues raised under review’. Typically mealymouthed but I think this is telling us that trust taxation is not going to change significantly any time soon. Therefore the choices as between personal ownership, trust ownership or sometimes corporate ownership are looking fairly settled.

To me the increase in corporation tax to 25% announced in the budget slightly changes the calculus here. Corporate ownership has been sought for a number of reasons, such as:

  • To enable profits to roll up at that low rate of corporation tax and allowing dividends to be fed out of the company at a lower rate of tax than normal income.
  • To allow research and development tax reliefs to be claimed
  • To access the extra deduction for land remediation relief.
  • The new capital allowances super deduction is looking quite interesting.

The hated Annual Tax on Enveloped Dwellings (ATED) and income tax benefit in kind rules cause problems with having land and buildings in companies, especially residential property with the farmhouse itself always causing questions. I feel that the increase in the corporation tax rate will slightly blunt the edge of the incorporation advantage.

I have always been disinclined to put the actual land and buildings in the company, as once these assets are in it is quite hard to get them back out again without creating tax charges. The goodwill of farming is held to be attached to the land itself which means that if the land is kept outside the company the goodwill is probably also outside the company which means that companies can come and go without too many problems if the land is kept outside. However, one of my nagging doubts has always been that if the goodwill is outside the company what is the company doing for tax purposes? To me therefore neither approach feels quite satisfying.

Another interesting little problem I’m starting to discuss with people is the question of business property relief for inheritance tax on the land. Payments under ELMS for looking after the land might be treated as business payments if they’re going to be received on the results basis. If the management of the land is in a company and the land is outside, the amount of such business property relief on the land value is likely to be decreased.

Trusts to me are a very good way of owning land as they allow the land’s integrity to maintained across generations. Income in a trust is subject to income tax rates, and assets can be transferred between individuals and trusts relatively easily especially where agricultural relief or business relief from IHT is available. I always suggest that trusts themselves just collect tax on behalf of the beneficiaries . Ultimately where trust distribute their income there is usually just one overall incidence of income tax at the rate of the beneficiaries. However if the trust does not distribute all of its income there is a net tax loss in the trust, but many existing trusts will be past their accumulation periods which was 21 years until this was changed in 2009 to become more flexible.

I consider ‘normal’ trusts to be fairly neutral from an IHT point of view, with a 10 year charge at 6% being close to the death rate for a person surviving to the biblically allotted threescore and 10 years – ie 6% * 7 is close to 40%. It will be interesting to see whether any changes are made to this in the future.

Capital gains tax is being reviewed and the interaction between inheritance tax and capital gains tax starting to make more sense. The granting of a tax-free probate value uplift the capital gains tax has been an anomaly for a long time and I think it’s fair for this to go. I looked at this in my article Here we go round the roundabout. We seem to be settling on 40% as being the amount that feels fair for the country to take, in terms of a higher rate of income tax, and inheritance tax or capital gains tax. The capital gains tax rates are always going to be slightly reduced for inflation either by a blanket lower rate such as we have now, or through some sort of indexation allowance.

We are still waiting to see exactly how local nature recovery and landscape recovery schemes will work, and we still don’t know exactly how net gain offset payments will work in practice. Therefore my feeling is that the fog is starting to clear, but the sun has not yet arrived.

I am going to be speaking about these matters for the Chartered Institute of Taxation in June, and am considering the acceptance of a speaker invitation at a university next year. I am therefore going to be keeping on top of this area over the next year or two so watch this space for updates.


A green future: Our 25 year plan to Improve the Environment: 2018

Agricultural transition plan: November 2020

Sustainable Farm Incentive: March 2021

Tax policies and consultations: Spring 2021

OTS Capital Gains Tax Review: Simplifying by design

Sustainable Farming Incentive Pilot

Photo by Spencer Pugh on Unsplash

Deadline alert: interest needs to be registered by 11 April 2021

The Sustainable Farming Incentive is designed to fill in the amount of basic payments that are tapering away over the next few years in England. This is one of three new schemes alongside the Local Nature Recovery and the Landscape Recovery schemes which are going to be piloted next year.

The scheme applies to farmers who are already receiving Basic Payment, and is due to be launched in mid 2022. Further information is scheduled to be released later this summer with the full details to enable farmers to get ready. However there is now an opportunity for farmers who are interested in getting involved in the pilot scheme and there is a deadline for applying of 11 April 2021.

This is how it all fits together – taken from the Government announcement:

The initial eight standards to be taken into the pilot are as follows:

  • arable and horticultural land
  • arable and horticultural soils
  • improved grassland
  • improved grassland soils
  • low and no input grassland
  • hedgerow
  • on farm woodland
  • waterbody buffering

With each standard there are three levels for participants to choose from: introductory, intermediate and advanced. These are all allocated specific payment amounts per hectare which I set out in a table below. Formal land management plans are not going to be part of the initial application but participants are going to be asked to prepare them as part of the learning process. To me this seems like a good opportunity for farmers and their advisors to learn more about the land and how to get the most out of it.

It is expected that reporting back may involve, on average, around the farmer to spend 10-15 hours per month to inform government learning on the scheme.

There will of course be some monitoring and some regulation behind the scheme but the impression given that this is going to be light touch and the most appropriate methodology for these will be developed alongside the pilot.


For the first phase, a farmer is only eligible if:

  • they are a recipient of the Basic Payments Scheme
  • the land is in England
  • there is no existing agri-environment agreement on the selected land
  • they must either own the land with management control or have a tenancy of enough length to implement their pilot agreement

It does not apply to land registered as common land or shared grazings

Payment amount

StandardInitial base rates (first phase of pilot only)
Arable and horticultural landfrom £28 up to £74 per hectare
Arable and horticultural soilsfrom £30 up to £59 per hectare
Improved grasslandfrom £27 up to £97 per hectare
Improved grassland soilsfrom £6 up to £8 per hectare
Low and no input grasslandfrom £22 up to £110 per hectare
Hedgerowfrom £16 up to £24 per 100 metres
On farm woodland£49 per hectare
Waterbody bufferingfrom £16 up to £34 per 100 metres

In some cases some further payments available, so it is worth looking up the documentation.

Timescale and first deadline

By 11 April 2021: Submit an expression of interest here

June 2021: selected farmers invited to submit an application

Summer 2021: agreements processed

October 2021: first agreements go live

November 2021: first monthly payments issued

Submit an expression of interest by midnight on 11 April 2021 if you want to join the pilot of the Sustainable Farming Incentive scheme.

To accountants

To the accountants among my readers I would say this: the government is stating that the Sustainable Farming Initiative should be easy enough for most farmers to be able to engage with without taking professional advice, and therefore I think this is an initiative that accountants should take on as part of their annual service to their clients. We don’t need to be experts in agronomy to be able to point out what is available on the official website. However, being close to the numbers enables us to weigh up the published figures on this guidance against current basic payments and historic farm performance.




Otter spotted . . .

The coronavirus pandemic has meant spending more time at home than I had originally planned for. Partly for this reason, one moment I was anticipating came while I was at home, staying safe and getting ready for a quiet new year. This video is from an estate of which I am a trustee, and which I take part in managing.

Until New Year’s Eve we had not seen Otters in the waterways, so this was the first appearance. We think she is a grown female pregnant with kits, so we are very thrilled to we may have a new family of otters. This one has just succeeded in catching a rather large and tasty looking fish.

This is going to be the year when work starts in earnest to bring the lake and rivers up to a good standard, making use of the new ecosystem service payments scheme within Tier 2, or even a Tier 3, under the new Environmental Land Management Scheme.

Otters are protected so we will, of course, be ensuring that all plans fall within all published guidance. It is my view that we protect wildlife best by allowing people to see and understand it. By doing this we build respect and love for the wonderful creatures living with us on this earth so it will be natural that we should find ways to live in harmony together with them.

A lot of value is gained from creating connected spaces for wild animals which means working with landowners for connected spaces. This is where the Tier 2 and Tier 3 schemes can help bring people together with a financial incentive.

I have had some interesting experience over the last year getting involved in a couple of rewilding projects, and especially thinking about how the tax and economics work. It is quite interesting that rewilding under the new schemes with the existing tax rules can give some surprising advantages to the landowner. Not least of these is that the payments for ecosystem services where there is a plan to carry out some actions for wildlife, and especially where those payments are based on results, can be treated as trading payments. Under current this this changes the nature of the land into being an asset that can qualify for business relief for inheritance tax purposes.

As the year progresses I will of course be sharing with you, from time to time, any interesting insights we gain in putting this scheme into place.

Stephen Poole


Government guidance on protection of Otters

Green Industrial Revolution – trees to the rescue!

Boris Johnson has today outlined his Ten Point Plan for a Green Industrial Revolution to support up to 250,000 new jobs.

The 10 points are:

  1. Offshore wind: Producing enough offshore wind to power every home, quadrupling how much we produce to 40GW by 2030, supporting up to 60,000 jobs.
  2. Hydrogen: Working with industry aiming to generate 5GW of low carbon hydrogen production capacity by 2030 for industry, transport, power and homes, and aiming to develop the first town heated entirely by hydrogen by the end of the decade.
  3. Nuclear: Advancing nuclear as a clean energy source, across large scale nuclear and developing the next generation of small and advanced reactors, which could support 10,000 jobs.
  4. Electric vehicles: Backing our world-leading car manufacturing bases including in the West Midlands, North East and North Wales to accelerate the transition to electric vehicles, and transforming our national infrastructure to better support electric vehicles.
  5. Public transport, cycling and walking: Making cycling and walking more attractive ways to travel and investing in zero-emission public transport of the future.
  6. Jet Zero and greener maritime: Supporting difficult-to-decarbonise industries to become greener through research projects for zero-emission planes and ships.
  7. Homes and public buildings: Making our homes, schools and hospitals greener, warmer and more energy efficient, whilst creating 50,000 jobs by 2030, and a target to install 600,000 heat pumps every year by 2028.
  8. Carbon capture: Becoming a world-leader in technology to capture and store harmful emissions away from the atmosphere, with a target to remove 10MT of carbon dioxide by 2030, equivalent to all emissions of the industrial Humber today.
  9. Nature: Protecting and restoring our natural environment, planting 30,000 hectares of trees every year, whilst creating and retaining thousands of jobs.
  10. Innovation and finance: Developing the cutting-edge technologies needed to reach these new energy ambitions and make the City of London the global centre of green finance.

There will be a the target of 30,000 hectares of tree planting per year from 2025, and using the Agriculture Act to encourage farming and land use techniques to sequester carbon in the soil and in woodland.

In my view the country is in a good place with the Agriculture Act and there is already a lot of activity in rewilding to allow this to happen quite quickly especially considering tier 2 and tier 3 schemes. I would like to see tier 3 being brought forward from 2024 to help this happen.

I’m fairly comfortable that the current tax system, and including changes potentially to be made under the new review, will fit fairly comfortable with this if rewilding is treated as an activity in the nature of husbandry and so gain various advantages from a tax point of you. And I think this is the way thought is headed now.

Let’s wait and see how this develops.


PM outlines his Ten Point Plan for a Green Industrial Revolution for 250,000 jobs

Sustainable Farming Initiative (England)

Photo by ASHLEY EDWARDS on Unsplash

We are starting to hear murmurings of the birth of a new scheme – the sustainable farming initiative in England. The environmental land management scheme is coming into force from 2024, but until then we will be under this new scheme in England. The illustration above gives full details of the scheme as available at present.

Scotland and Wales have their own systems and will not be part of this plan.


Stephen Poole

Photo by John-Mark Strange on Unsplash

Where are we with woodlands – are they still a good tax planning vehicle? I seek to tease out some answers below

What is woodland?

Growing trees on land is a very ancient activity, and there are many reasons to do so. Nowadays woods can be held for various activities which might be for felling to provide timber or heating, it might be grown as a habitat for hunting-based activities, it may be part of a woodland burial trade, it may be grown as part of a countryside stewardship activity with mainly ecological motives, and it may be part of a rewilding scheme where payments are received for public goods.

Certain activities are deemed by the legislation to be trades if they would not otherwise be so. Farming is one such occupation and it is worth pondering a moment on section 996 of the Income Tax Act 2007, because the wording with this old piece of legislation has defined the way farming has been taxed for generations.

Here we see that farming is the occupation of land for the purposes of ‘husbandry’. This is taken to not include forestry activities or market gardening but it does include hop growing, some horse based activities (which I will look at elsewhere), and short rotation coppicing. A “short rotation coppice” is defined as “a perennial crop of tree species planted at high density, the stems of which are harvested above ground level at intervals of less than 10 years“.

In addition section 11 of the Income Tax (Trading and Other Income Act) 2005 exempts the commercial occupation of UK woodlands from income tax, so profits or losses arising from such occupation are therefore ignored for income tax purposes. Incidentally this is does not spring from altruistic motives on the part of government, but by the particular problems of accounting for tree growing. If this were to be taxable HMRC would be given tax reliefs up front and waiting a long time for their share of the profits…

Before I go into detail I think it helpful to tabulate the income tax, capital gains tax and VAT position as regards some activities on land.

Income taxCapital gains taxVATInheritance tax
Farmland used for growing cropsTradeLand subject to CGT but rollover relief and other trade reliefs may be in pointLand exempt unless opted. Sales of crops taxable subject to zero rating for foodAgricultural Relief on agricultural value if for human consumption, also potentially Business Relief on full value
Short rotation coppingTrade included with all other farmingLand taxable, crops outside scopeSales of wood standard rated -see note 1Business relief if trading
Commercial woodlandExempt from income taxTrees exempt but land taxable.
As aboveBusiness relief if trading
Other woodlandPotential taxable if there is a tradeLand taxableTrees taxable if there is a business – see note 1Business relief may be possible if within and environmental scheme
1) sales of wood subject to reduced rate of 5% if for heating

Income tax

In general the sale of timber from woodland will be exempt from income tax to some extent. Either the woodland is managed commercially in which case the exemption would apply or if it’s not managed commercially then there may not be a business in the nature of trade in which case the trees will not be subject to income tax. For the income tax exemption this will apply to operations on the tree until it is felt and lying on the ground “in the round”.

Operations on the wood after felling are potentially taxable. For example if the wood is then going to be chipped to be used in heat generation they will need to be a value transfer into the chipping trade. The chipping activity and become the taxable activity.

If the woodlands are not commercially managed then whether or not the sale of trees will be taxable will be dependent upon whether there is a trading type activity carrying on. If there is then there was a potential income tax charge on the sale of trees and note in particular that short rotation compassing is treated as trading within the farming definition. There may also be a charge for capital gains tax see below.

Investment into EIS, SEIS and VCT is generally not available, not surprisingly perhaps.

Capital gains tax

If a woodland is not managed commercially and not within the income tax and capital gains tax exemption then is a question as to whether the sale of a tree is subject to capital gains tax, But trees would be each treated as a single chattel and not a set and therefore subject to a couple of gains tax exemption each of £6000. It is therefore unlikely that a single tree would be subject to capital gains tax. In the case of the sale of a woodland which was not commercially managed the value of the wood in the woodland would be part of the proceeds for capital gains tax. Clearly there are many complications here and advice will need to be taken in each case. HMRC provide a good summary here.

Rollover relief can be available on a purchase or sale of Woodlands but only to the extent of the underlying land if the land is managed commercially. The proportion of the total price represented by the land will depend upon the age of the trees but in any cases it is it will be significant.The same applies to other business capital gains tax reliefs such as holdover relief and entrepreneurs relief. Specific advice needs to be taken in these areas.

Rollover relief is a relief from capital gains tax whereby if a capital gain is made and within the four year window starting one year before and ending three years after that disposal the proceeds on sale are reinvested into another trading asset, the capital gain on the disposal might be rolled into the base cost of the new asset leading to a much reduced capital gains tax bill but at the price of a potential future bill. I do not intend to go into the complexities of this here but happy to give advice if necessary.


Sales of Woodlands will be treated as taxable for VAT purposes if there is a business activity. In many cases this will be based upon how things look on the ground and in most cases where trees are felled and sold on a relatively commercial basis VAT should be assumed to be in point. It will therefore be necessary to check whether the registration threshold has been exceeded. The lower rate of 5% can be available on the sale of wood if the wood is going to be used for heating. Specific advice taken.

Inheritance tax

If your client owns woodland, an election may be made to leave out the value of the timber from the value of the estate (but the value of the land will be included). This is not a forever gain as the tax or come back into point Adam when trees are sold. Detailed records will therefore need to be kept.

Subject to the above election it will often be more important to consider where the business relief will be available on the value of the Woodlands on death. This would include the full value of the land and the growing trees to potentially fully exempt the woodland.

Other thoughts

A few other thoughts (by no means to be taken as exhaustive) not to be forgotten but each of which will require specific attention.

For people with SIPPS, a particular advantage of Woodlands is that they are treated as commercial land for the purposes of investment into pensions. Specific advice would need to be taken on this.

Carbon trading within the woodland carbon code may be available giving rise to potential upfront payments on planting of trees.

Countryside stewardship capital grants and maintenance payments may be available for planting of woodland. This will be continuing until 2024.


HMRC guide to CGT on trees

Woodland Carbon Code

The future of farming and green recovery

Stephen Poole

Photo by Sam Carter on Unsplash

This is a personal view that I have put together partly in response to being told by farmers that they plan 2 years ahead in their plans, but accountants work one year in arrears.

Also, in my view, we have a once in a lifetime opportunity to make a real difference and it is important to understand how to make use of all the tools and incentives available. With that in mind, I am going to try to pull together the various forces acting at the moment, and keep an up to date summary here of policy and taxation measures relating to agriculture.

I have a special interest in rewilding so I have some comments on this at the end.

Natural capital accounting

As part of understanding the way we live within, make use of and return parts of the natural world, it can be useful to account for the natural capital as part of accounts.

Valuation of the natural environment in business plans takes account of

  • what have the business got
  • what can it do
  • what is it worth

I recommend the guide produced by EFTEC which has an example balance sheet in Annex 3. At the moment the exact figures for the various component parts are not always easy to come by, but they are starting to be tabulated, and I will update this page with full details when available.

There is a distinction between private and public consumption and the hope is that public natural capital increases can be monetised, and potentially private flows also. As a general rule we think

  • private amounts to the extent that the assets are protected
  • public if available to public as a whole

Monetising natural capital flows

This a summary of the main current ways to monetise activities:

  1. through the future ELMS payment system which has a phased introduction to take over from basic payments. Update in process
  2. carbon offsetting with the Woodland Carbon Code, a voluntary standard. This gives a standard value on stored carbon in tree and landowners planting trees can potentially benefit from selling Carbon upfront payments of between £5 and £15 / tCO2. Woodland carbon guarantee scheme auctions every 6 months
  3. biodiversity net gain offsetting under the environment bill. This will inform future planning to increase biodiversity, and farmers may benefit from offsetting payments from local development (see below)
  4. water companies make payments to farmers who put in place flood control and water qualify improvement schemes
  5. green prescribing – the mental health value of being outside – a source of income for businesses with outside spaces, with the impact being a pure good
  6. Countryside stewardship payments with good examples of payments for creation of woodland giving, for example, capital grants of up to £6,800 per hectare and annual maintenance of around £200 per hectare

As a general guide, my experience is that the cost of baseline valuation will fall between about £1000 for a very simple situation to £10000 for a complex estate.

Countryside Stewardship payments

Countryside Stewardship agreements will continue for 2021, 2022 and 2023, but will then be replaced with the new Environmental Land
Management Scheme (ELMS). This will follow trialling and testing and a national pilot involving farmers and land managers. Under current plans, the full ELMS system will be in place from 2024. However it is expected that this timescale may slip.

Net gain

At the Spring Statement 2019 the government mandated that net gain would be mandated in the Environment Bill and is contained at section 90 et seq which propose a new Schedule 7A to the Town and Country Planning Act 1990. The Bill was introduced in January 2020 and is currently in committee stage and scheduled to report on 25 June 2020. In essence the Bill requires a 10% increase in biodiversity included credits obtained.

I am not going to provide a full overview of the Environment Bill here, but will comment on parts of it as it passes through the house. It contains far more than is mentioned here and requires separate study, in due course

Tax reliefs

A brief overview of tax reliefs.


Averaging of profit under both 2 year and 5 year schemes


Capital allowances on investment up to a current limit of £1m

Entrepreneur Relief on sale of active farmland to give a 10% rate of capital gains tax

Inheritance Tax

Agricultural relief on land used for agricultural purposes, which is largely centred around being used for the production of human consumable food and other products

Business Relief where the land is mainly not held as an investment asset, applies where an active trading activity is carried out. This is more complex and will be covered in a separate article.


Commercially managed woodland is exempt from income tax and capital gains tax. In addition there is an IHT relief which defers IHT payments on growing trees. This will be covered in a separate article.


Rewilding can be seen as a use of land to increase the biodiversity. The above schemes can be used together and note that payments can usually be claimed for the same asset if this has more than one beneficial aspect.

At the moment about 0.3% of land area in the UK is rewilded and even ambitious plans tend to only envisage this increasing to about 5%. However this rewilded area could have an impact much larger than its area suggests.

In general it is probably not going to be worthwhile to attempt to rewild small areas, and an arbitrary lower limit could be set at 1,000 acres if large mammals are part of any rewilding plan. However, working with neighbours will allow areas of land to be connected up across landscapes. For this reason, a large part of a rewilding initiative will be connecting up land areas so action across areas involving multiple land owners is envisaged.

From a tax point of view, wild land can fall within the tax reliefs, for example where land is managed under a land management program agreed with Government under ELMS or a similar scheme payments under that scheme can potentially be seen as a payment for the service of providing the ecosystem service that the payment is based around.

As far as woodland is concerned, if these are managed under an agreed scheme it might be argued that this is commercial so should fall within reliefs. This will be covered separately.


Farming for the future policy update February 2020

Natural capital accounts – final reports

Woodland carbon code

Bi0diversity net gain

Countryside Stewardship

Ecosystems Knowledge Network

Natural capital committee

Agriculture Act reference

updated on 11 November 2020: Royal Assent

The Agriculture Bill finished its tortuous path through Parliament today becoming the Agriculture Act.

The current list of purposes for England

  • managing land or water in a way that protects or improves the environment
  • supporting public access to and enjoyment of the countryside, farmland or woodland and better understanding of the environment
  • managing land or water in a way that maintains, restores or enhances
  • cultural or natural heritage
  • managing land, water or livestock in a way that mitigates or adapts to climate change
  • managing land or water in a way that prevents, reduces or protects from environmental hazards
  • protecting or improving the health or welfare of livestock
  • conserving native livestock, native equines or genetic resources relating to any such animal
  • protecting or improving the health of plants
  • conserving plants grown or used in carrying on an agricultural, horticultural or forestry activity, their wild relatives or genetic resources relating to any such plant
  • protecting or improving the quality of soil

the additional purposes

  • starting, or improving the productivity of, an agricultural, horticultural or forestry activity
  • supporting ancillary activities carried on, or to be carried on, by or for a producer


Gove 25 year plan

The Agriculture Act

ELMS – environmental land management scheme

Update 18 June 2020: announced by Victoria Prentis that full detail in Autumn 2020. Most farmers can expect form filling to be minimal.

This is a new system of making payments to land managers in England made possible by the Agriculture Bill. This is an attempt to summarise the current position.

Scotland has its own Agriculture Bill and will be building a different system.

In Wales there is the Sustainable Farming and Our Land.

I am restricting myself to the ELMS in England for the period of this post.

The 25 February 2020 consultation is the primary source of information about the future of the scheme at the present time

Time scales

The taper period is as follows

  • National pilot starts in 2021
  • ELM full roll out 2024
  • Taper from 2021 t0 2027 when fully operational, with phasing out of direct payments

Countryside Stewardship agreements will continue to be available until 2024.


Three tiers are envisaged within the scheme to allow different levels of involvement

Tier 1

This tier focuses on encouraging environmentally sustainable farming and forestry and include actions to create environmental benefits for the majority of farmers to take across their farmed and forested land. Whether it’s using cover crops or planting wildflower margins, this tier could pay farmers across the country to adopt (or continue) practices that can generate valuable outcomes, focusing on those practices that are most effective when delivered at scale.

  • Nutrient management (including manure management)
  • Pest management(such as Integrated Pest Management, biological control, and precision/spot spraying pesticide application)
  • Livestock management (such as improving feed efficiency of livestock through targeted breeding to reduce ammonia emissions, limiting grazing to avoid compaction and run-off)
  • Soil management(such as avoiding cultivating/trafficking on wet soils, soil organic matter content, maintaining water levels in peat soils, contour ploughing, minimum- or no-tillage cultivation)
  • Field margins (such as flower-rich/species rich margins/field corners, riparian buffer strips)
  • Field cover (such as cover crops, arable rotations, companion cropping, leys)
  • Water storage/efficient water use

It is expected that payments will be based upon actions taken rather than outcomes to keep this clear and make sure farmers are given clear guidance on what they need to do in order to deliver environmental outcomes while keeping their financial and delivery risks low. Payment rates are likely to be based on the income foregone and costs incurred, with some flexibility to enable a range of outcomes.

Tier 2

This tier would be to support land managers in the delivery of locally targeted environmental outcomes. This tier would target agreed priority outcomes, making sure the right things are delivered in the right places. As such, it may need to use some form of spatial targeting and local planning. Many of the outcomes this tier will deliver may rely on collaboration between land managers. It could therefore include a variety of mechanisms for encouraging and rewarding collaboration and join-up between farmers, foresters and/or other land managers.

Examples of what we might be included:

  • Tree, shrub and/or hedge planting
  • Habitat creation/restoration/management(including woodland, wetlands, freshwater, peatland, heathland, species-rich grassland, coastal habitat, urban green space)
  • In stream/river and on-land interventions to mitigate flooding and to manage sediment for water quality
  • Species management, for example, introduction, translocation and/or recovery and invasive species prevention/control
  • Rights of way, navigation and recreation infrastructure
  • Education infrastructure, events and services
  • Geo diversity asset (such as limestone pavements) and heritage asset management

A farmer might be within tier 1 for most day to day farming activities, but potentially become involved in this tier on a specific locally required scheme, for example a water scheme if the farmer has a river running through the land. This would be done in collaboration with other land owners through which the river runs

Tier 3

This tier focuses on delivering landscape scale land-use change projects, where such projects drive added value over and above what can be delivered through tiers 1 and 2. It would coordinate projects that are critical in helping us meeting ambitious environmental commitments such as net zero. This would be fully aligned with activity under the government’s Nature for Climate fund for afforestation and peatland restoration.

Projects might include:

  • Forest and woodland creation/restoration/improvement
  • Peatland restoration
  • Creation / restoration of coastal habitats such as wetlands and salt marsh

Again, as for tier 2, a particular farmer might participate in tier 3 while also being in tier 1 (for most farming activities), tier 2 (for example the river above), and maybe within tier 3 for a land use change project – for example creation of a coastal salt marsh area if the farmer has suitable land. Such a scheme will clearly only work where there are a number of land owners coming together.


25 February 2020 consultation