Farmers uneasy over business rates ahead of Spring Budget

The business rate changes that will be announced tomorrow by the Chancellor is feared will increase the strain on some rural businesses
The business rate changes that will be announced tomorrow by the Chancellor is feared will increase the strain on some rural businesses

Farmers are calling on the Chancellor to help UK businesses in the rural sector that are currently feeling 'high levels of unease'.

While retailers and commercial occupiers have been vocal on the impact of the 2017 business rates re-evaluation, the changes that are scheduled to come into effect in April will increase the strain on some rural businesses, says Tim Jones, head of rural at Carter Jonas.

"This is particularly relevant where farmers have diversified, such as opening a farm shop, and are now facing very significant rate rises," he said.

Landowner organisation the CLA said businesses across the countryside are facing a hike in their tax bills as a result of a 'flawed' rates system that is in 'urgent need of review.'

Tim Price, NFU Mutual Rural Affairs Specialist, said: "Farmers who have diversified and now use their premises for commercial, tourism or retail enterprises are being hit by higher business rates, which is adding to the pressures on farmers’ incomes at a time of low profitability for many farming sectors.

"We’re hoping that the Government’s promise to look at this issue will result in the immediate implementation of full planned rises being delayed."

'Major cost to farm businesses'

It is
It is 'vital' Brexit does not impact negatively on the UK's ability to make long-term business decisions for the rural economy

Tim Jones said there remains an issue with unoccupied property as landlords are required to pay business rates on the properties, even if they are unlet.

"This is a major cost to farm businesses at a time when they can least afford to pay," he said.

"An announcement to fundamentally change the system is unlikely, but we have already been told that the Chancellor is in listening mode so any procedure to lessen the impact on the worst affected, and ease the introduction of new rates, would be positively received."

Mr Price said: "Until Brexit plans are confirmed, UK farmers are currently unable to make long-term investment because of uncertainty about future agricultural support and export opportunities.

"To help farmers through this transitional period we are urging the Chancellor to support farmers and the rural community – by simplifying both business and inheritance tax rules and avoid introducing measures that could add more financial stress to rural businesses."

Mr Jones said Brexit continues to draw ever nearer, but it is 'vital' that the next stage of the process does not impact negatively on the UK's ability to make long-term business decisions for the rural economy.

"Whilst funding for direct support at current levels is confirmed in some format until 2020, we need assurances that the Government will back a new fully-funded agricultural policy for food production and the rural environment to safeguard the growth potential of this part of the economy beyond the next three years."

Broadband

In December last year, the government announced plans to bring superfast broadband to some of the country’s most remote communities, and farmers say they would like to see further detail on these plans tomorrow.

"The benefits would be significant enabling businesses in remote parts of the country to compete with their urban counterparts," said Mr Jones.

"Levelling the playing field between 'more accessible' rural areas and those that are currently less connected will spread economic prosperity, which is a central goal of Theresa May’s administration."

The chancellor will unveil a new 5G strategy on Budget day, setting out steps for the UK to become a world leader in the next wave of mobile technology.

The plans are part of a £1billion investment in research and development in the UK to 'Brexit proof Britain' after the country has left the European Union in two years' time.

Ian Liddell-Grainger, the Tory MP who chairs a parliamentary rural broadband group, told the Telegraph: "Every party in the UK has been saying this needs to be rolled out as fast as possible. It is hugely important and absolutely vital.

"The percentage of people who now work at home in rural areas is going up massively. Small businesses nowadays have to have high-speed broadband. You can’t run a business without it."