By Olivia Cooper
RURAL business advisors have urged Gordon Brown to take positive steps towards regenerating the rural economy in his pre-Budget report later this month.
The Institute of Chartered Accountants Farming and Rural Business Group (FRBG) has recommended changes to the current tax system.
At present, the group says, it hinders the development of rural enterprises.
“Many rural businesses are fighting for their lives,” says chairman Aubrey Davies. “Their long-term survival depends on new incentives to encourage investment.”
The Pre-Budget Report, due out on 27 November, introduces policy reforms for national consultation prior to the next Budget.
FRBG recommendations include removing current farming restrictions on the Enterprise Investment Scheme.
This would open up a new source of income for farmers through tax relief on new investments.
The group has also called for a revision of the definition of “business assets” for the purposes of inheritance tax and CGT, to include business lettings.
If approved, farmers would not lose out on IHT relief and CGT rollover and holdover relief, and could create more income from redundant buildings, says Mr Davies.
“The government keeps calling on farmers to diversify, but some tax regulations prevent them from doing so.
“We are calling on the chancellor to use his next budget to create a favourable environment in which rural enterprise can flourish,” he says.