This piece is an extract from our Latest from the Woods newsletter (previously Forestry Latest News), which is emailed out at 4PM every Friday with a round-up of the week's top stories. 

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IN the first Labour Budget since 2010 – and the first ever delivered by a woman – Chancellor Rachel Reeves promised to “invest, invest, invest” as she made sweeping changes to national insurance contributions,  capital gains tax and inheritance tax. 

Many of her announcements will have great ramifications for forestry businesses up and down the country, which are already feeling the pinch of tough market conditions, poor planting rates, and a myriad of other challenges

WANT MORE ON THE BUDGET? 

After spending several days wading through it all, here are some of the key takeaways from the Autumn Budget for forestry professionals. 

1) No fresh money for tree planting in England 

While the Chancellor committed to investing "£400 million in capital across 2024-25 and 2025-26 for tree planting and peatland restoration", it later emerged this was not new funding. Instead, it will be taken from the existing Climate for Nature Fund. However, it is not yet known how much of the money will go to tree planting and how much on other endeavours. 

2) Commercial woodlands will be subject to business property relief changes 

At present, the entire value of commercial woodland, including both the land and the trees, attracts business property relief of 100 per cent once it has been owned for two years; essentially meaning they avoid inheritance tax. However, that will no longer be the case. Like with agricultural property relief (which you will have seen mentioned in great detail elsewhere), BPR will now drop to 50 per cent for assets over £1 million, at an effective rate of 20 per cent. 

3) Double cab pick-ups to be treated as company cars 

An announcement so subtle that only a couple of outlets seemed to notice it. But after being given a temporary reprieve by the last government, double cab pick-up trucks will be treated as company cars for tax purposes, dramatically increasing the benefit-in-kind (BIK) tax paid by drivers. Double cabs are much favoured within forestry.

What have forestry leaders said? 

  • Jon Lambert, partner at Goldcrest Land & Forestry Group, said: “The Budget suggests a casual disregard for the rural fabric of the UK. The news that Business Property Relief is being reduced is unwelcome and disappointing, particularly when set against other challenges within the forestry sector such as the reduction in planting grants and low timber prices. While forestry remains a comparatively attractive asset class, this taxation adds to existing obstacles within the industry and will do nothing to stimulate positive custodianship of our beloved countryside.”
  • Christopher Williams, chief executive officer of the Royal Forestry Society (RFS), said: "If we are to address our needs for home-grown timber, fight climate change and address the loss of biodiversity and natural capital, which underpins our economy, we need to invest more in forestry. Defra suffered badly during the austerity years, and could really have done with more resources to enable it to address these challenges going forwards. Defra’s budget overall has not been significantly affected by the Autumn budget announcement, so whilst it did not get the boost it needed, it has at least not suffered as much as many had feared." 

  • Stuart Goodall, chief executive of trade body Confor, said: "Depending on how public funding is allocated, there is - on paper at least - likely to be sufficient funding available to follow through on the aspiration to increase the level of woodland creation in England. Confor will be seeking more detailed information on this in the coming weeks. It is also worth noting the impact of the Budget for forestry in devolved administrations. The Chancellor has claimed that this year’s is 'the largest real term funding settlement since devolution' and, following the savage cut to the Scottish planting budget in 2024/25, Confor will be lobbying hard to see those funds appropriately allocated for 2025/26 and 2026/27."