Below is an overview of the changes to the Agricultural Flat Rate Scheme coming into effect on 1st January 2021 from HM Revenue and Customs:

What is the Agricultural Flat Rate Scheme (AFRS)?
The AFRS is an alternative to VAT registration for businesses involved in designated agricultural activities. It is designed to offer an alternative to the administrative burden of VAT for small farming businesses.

If you register as a flat rate farmer, you do not account for VAT or submit returns and so cannot reclaim input tax. But you can charge and keep a flat rate addition (FRA) of 4% when you sell goods or goods and services to VAT registered customers.

Changes to the Agricultural Flat Rate Scheme
Entry and exit eligibility criteria based on turnover are being introduced to the AFRS from 1st January 2021.

Once the changes are implemented, businesses can join the AFRS when their annual turnover for farming activity is below £150,000 and remain on the scheme until their annual turnover for farming activity exceeds £230,000.

The purpose of the changes is:

• To provide clear and precise rules to offer our members clarity on the scheme
• To offer specific and focussed support for small farming businesses
• Offer consistency with other HMRC simplification schemes

From 1 January 2021 the UK will have left the EU, and depending on the outcome of current negotiations, the UK will likely be trading on third country terms. This means new rules for live animals entering the EU will apply.

From 1 January 2021 the two-letter ISO country code of ‘GB’ will have to be used to identify livestock exported to EU Member States. This will mean an additional tag which includes the country code GB and the animal’s individual ID number will need to be applied prior to export.

As an alternative for newborn animals that are not yet identified or lambs with slaughter tags, UK tags with a GB suffix could be applied. These are tags which bear UK plus the individual number as well as GB printed on them.

Further details of the tags can be found here.

Despite a number of discussions on the introduction of bovine electronic identification (EID) earlier this year, Welsh Government has recently confirmed that it is going to be introduced later than anticipated with bovine EID tags not being available on the market until at least 2022.

The FUW continues to participate in discussions on the proposals on identification, registration and movement reporting prior to the Welsh Government consultation, expected in Summer 2021.

Welsh Government recommends that cattle keepers only order enough conventional tags to cover calves expected to be born in 2021.

Further updates will be announced towards the end of 2021 in regard to the timing and definite timescales which are subject to the consultation responses.

The British Cattle Movement Service (BCMS) has announced that cattle passport amendments can now be posted once again.

Due to the Covid-19 pandemic, BCSM requested for cattle keepers to send passport amendments via email to reduce the need to travel.

If possible and restrictions allow, BCMS are now asking for keepers to return to the original posting process:
Write on the passport what information needs to be amended

• If the amendment is to the date of birth, or requires 3 or more amendments, please also send a copy of your calving records
• Post the original passport to:
  British Cattle Movement Service, Curwen Road, Workington, CA14 2DD
• It is also advised to ask for proof of postage