A simplified tax system for farming businesses could help unleash the potential of the rural economy, the Country Land and Business Association says.
The CLA, which represents 30,000 rural businesses in England and Wales, submitted its proposals to the Treasury for a new Rural Business Unit.
The group argues that there should be one set of coherent tax rules to be applied to all business activities undertaken by entrepreneurial farmers which are managed as one economic unit.
The Rural Business Unit would allow greater freedom of investment within rural businesses, leading to productivity growth and more tax paid to the Exchequer, it adds.
CLA President Mark Bridgeman said: “The administration of our proposed system would be a simplification, saving time both for HM Revenue and Customs and for rural businesses.
“The change is considered necessary particularly in light of changes to agriculture post-Brexit.”
He said many farmers are looking to diversify their business to protect themselves from uncertain trading conditions.
Because of this, government should 'enable and encourage' farmers to take action by making it as easy as possible to adapt their business model.
The CLA is encouraging MPs to write to the Treasury in support of the proposals, many of whom promised to champion the rural economy during the general election.
Mr Bridgeman said: “We encourage MPs to contact the Treasury asking ministers to include our proposals in the Budget next month.
“This is a great opportunity to boost rural productivity through a simple administrative change that we expect to be cost-neutral to the Exchequer.”
