For the Chancellor’s Autumn Statement on the 29th November, Mike Harrison of Saffery Champness Landed Estates & Rural Business Group lists 3 of the key measures that the Chancellor, George Osborne, should implement to boost the rural economy in the UK:-
VAT
A reduced rate for property works would help stimulate the building trade. This could apply to maintenance work as well as extensions. A 20% rate will lead to lower economic activity and perhaps more ’black market’ operations.
Many rural FHLs are uncompetitive due to VAT and even more so with the rate at 20%. Again, perhaps tourism could be stimulated by a reduced rate of VAT. This would encourage more holidays at home and in the countryside which would help boost the rural economy.
Tax relief for investment
The reduction for tax allowances for businesses change next April. In part the corporate businesses will benefit with the lower CT rates which will offset the reduced allowances for capital expenditure on plant and machinery. However, those trading via partnerships or as sole traders are penalised as there is no associated reduced in income tax rates for their businesses. Perhaps higher allowances could be made available to such businesses to encourage investment.
Taxing the rural business as ’one entity’
This has been suggested for many years and becomes more relevant as farmers and landowners diversify more and more. For the majority of businesses one activity supports another so why should losses of one not be offset against profits of another. This is especially important in times of an economic downturn.
