Make tax less taxing, say landowners
THE CLA is asking political parties to back its Rural Powerhouse initiative, designed to help the countryside become more productive. The pivot is a call for a simplified tax regime for rural businesses. Director-general Sarah Hendry notes ‘many, many members’ have identified the tax system as a huge hurdle for farms and estates.
As Martyn Dobinson of chartered accountants Saffery Champness says, under current rules, ‘rural business owners are required to report their results separately to HMRC for farming, furnished holiday letting, other property rental and other trading activities’. This is not only an administrative headache, but means that landowners face the complex task of apportioning overhead costs across a variety of business strands. With the tax system poised to go digital and move to quarterly income-tax reporting obligations, these burdens look set to increase.
The CLA would like the Government ‘to allow diversified rural estates to choose to be treated as a single unit for tax purposes’. The simpler tax regime, which Mr Dobinson calls ‘very interesting’, would ensure that ‘losses arising on one activity are automatically relieved against taxable profits arising from other businesses’. This will potentially stimulate investment.
The benefits of a tax reform could be amplified by improvements in rural connectivity and support for new skills and innovation. However, infrastructure alone is not enough to prepare the countryside for a future increasingly shaped by technology and the drive towards carbon neutrality, so the CLA is calling for an investment of £200 million a year to help equip farmers and landowners to deliver public goods and to produce food effectively and sustainably. All this should be underpinned by support for the UK’S high welfare and environmental standards. ‘We think that’s an asset,’ says Miss Hendry. ‘It would be perverse if it were to be undermined because future trade deals allowed food produced to lower environmental, climate and welfare standards to be brought in.’ (See Interview, page 42.) CP