In part one of our exclusive series on farming taxation and accounting, Phil Fenn, partner at Mercer and Hole, warns that although operating as a partnership is standard practice for many UK farms, there are potential pitfalls such as the risk of unlimited liability and the implications around each partner owning a share of the assets
Agriculture contributed around £24bn of revenues and £8.5bn of gross value added to the UK economy in 2015. It also provides over 475,000 jobs directly as well as supporting a further 30,000 jobs through procurement activity benefiting other sectors of the UK economy, ranging from manufacturing, transport and construction through to professional and financial services. It also plays a vital role providing 61% of the raw materials for the wider UK agri-food industry which provides over 3.7m jobs and generates around £18bn of gross export earnings for the UK each year, according to the Development Economics Contributions of UK Agriculture report.
Many farm businesses in the UK operate as partnerships. Often they simply evolve as the farmer, operating as a sole trader is joined first by their spouse in a husband and wife partnership, and then by their children as they become involved in the farm.
