The freezing of fuel duty for a further year, exempting apprenticeships from national insurance, and a further extension to small business rate relief all have the potential to help farmers, but it is 'disappointing', the NFU said, that the changes to Stamp Duty Land Tax relate to residential property only.
Farmers in the UK have been dissecting the Chancellor's Autumn Statement to see what it means for them.
“The Chancellor again suggested a need for a more balanced national economy but confined this to building a northern powerhouse in northern cities.
"We think there is a need to encourage business investment and growth in productive capacity throughout the whole of the UK. It is disappointing that no mention was made of the annual investment allowance or encouraging investment in business infrastructure or managing business volatility – some of the NFU’s key asks in our submission.
Business Rates
During his announcement George Osborne revealed a number of new measures that will have major repercussions for small and medium-sized enterprises (SMEs).
One of the biggest sectors to benefit from the budget was retail, where businesses based on the high street will see their £1,000 business rate discount increase by half to £1,500. This was part of a wider promise by the Chancellor to review business rates in the future.
This is a move that will be welcomed by pubs, restaurants and shops who have been struggling to compete with large supermarkets and online shopping.
Mr. Osborne also declared that the Government would increase the amount of research and development tax relief SMEs received by 230%. He said that the Government wanted “British businesses [to] do more research and development – this is crucial to our productivity."
This move will allow a lot of SMEs to free up finances in other areas of the business, giving them the ability to quickly expand.
However, it is the changes to stamp duty that are likely to affect the majority of people. In a move aimed squarely at the sites of destroying any prospect of Labour’s “Mansion Tax”, Mr. Osborne announced major reforms to Stamp Duty that will see individuals buying homes worth over £1.5 million, pay a top rate of 12% under a new stepped system.
The new measure, which will come into force from midnight, will see no Stamp Duty paid on the first £125,000 of a property’s value, followed by 2% on the next £125,000, then 5% on the next £675,000, followed by 10% on the next £575,000, while a rate of 12 % applying to the on the remaining value of £1.5m.
Steve Bramall, a Partner at Smailes Goldie said: “The introduction of higher business rate discounts for high street businesses and the increase in research and development tax relief shows that the Government has finally begun to recognise and reward SMEs for their role in driving the UK economy forward.
“Much of the 3% growth in GDP can be traced back to these firms, many of whom are our clients, and remain the backbone of Britain’s economy.
“But while businesses may be celebrating, people with homes valued over £1.5 million may not. For them this Autumn Statement could have a number of implications on their future.
“The move, which appears to be aimed at sinking Labour’s Mansion Tax, has fallen short of the mark and would fail to collect even a small amount of the yearly income proposed in the Opposition’s policy.
The Chancellor announced a full review of the structure of business rates, due to report in the Budget 2016. He also announced a continuation of small business rate relief and a cap on annual increases in business rates at two percent. He did not provide relief on empty property rates.
CLA President Mr Robinson said: “Businesses across the rural economy are suffering from business rates that increase year after year. We will engage with this important review and make the case for reducing the burden of tax to promote investment and growth across our rural communities.
“We are disappointed the Chancellor has once again failed to remove the tax on empty properties that is essential to allow owners to afford the investments needed to bring these properties back into use.”
Infrastructure
The Chancellor set out the National Infrastructure Plan which included details of a range of major infrastructure projects.
Mr Robinson said: “We recognise the role that investment in roads, rail and other vital infrastructure will play in supporting long-term growth across the national economy. These projects will require acquisition of land, some by compulsory purchase. The law that makes this possible is in need of urgent reform to ensure fairness and provide certainty for landowners and the taxpayer.
“The Government’s consultation coming forward on this is an important breakthrough for CLA campaigning on this issue.”
Flooding
The Chancellor announced a new tax relief on business investments in flood defences offset against Corporation or Income Tax.
Mr Robinson said: “Tax relief for businesses investing in flood defence is an important recognition of the role landowners across the country are playing in protecting vital agricultural land and rural communities. We will continue to press for the support needed for all businesses engaged in this critical work.”
NFU's Clark said: “Although news of tax relief for business contributions to flood defences is welcome, it is disappointing that flood-related announcements all relate to pre-planned capital expenditure and do not address our concerns over maintenance investment.
