Autumn Statement 2016 – The rural impact
Philip Hammond’s first Autumn Statement on 23 November 2016 seemed to offer little for farmers and rural businesses. Whilst there were some new initiatives on benefits, the living wage, infrastructure spending and housing, and we were pleased to see confirmation of the reduction in Corporation Tax, this will do nothing for the typical unincorporated rural business.
Once again there is some devilry in the detail. Insurance Premium Tax has doubled within two years and has now risen from a modest 2.5% when it was introduced. This is particularly likely to affect rural areas where the level of car ownership is necessarily higher. There is also an ominous mention of reviewing the way benefits in kind are valued for tax purposes, particularly in respect of employer provided accommodation – a change which might have a particularly serious impact on the agricultural sector where the tied cottage can still represent a significant element of a farmworker’s remuneration and an essential component in employing staff to rural areas.
[sc name=”find-out-cta” title=”Farming and Rural” content=”Take a look at how we can help businesses in the farming and rural sector.” href=”http://2-chicks-same-time.info/specialist-sectors/farming-and-rural-business/”]
There are of course some welcome announcements for the rural economy. An investment of £1 billion has been promised to improve broadband communications (although there is a fear that this may just speed up connections for those who already have broadband at a speed which rural businesses can only dream of). The doubling of the Rural Business rate relief will be of great benefit to village shops, post offices, garages and pubs, removing many of these vital businesses from the rating charge altogether.
We are, however still very worried about the massive changes to tax administration which will follow on from the “Making Tax Digital” regime. These are likely to have a far greater practical impact on rural businesses than any of the other changes announced in this Autumn Statement. Here there was a resounding silence, broken only by the promise that a response to the consultations held in the Autumn will be released in January – barely 14 months before the provisions of the new system come into effect.
[sc name=”find-out-cta” title=”Making Tax Digital” content=”Take a look at our thoughts on HMRC’s plan to ‘Make Tax Digital’.” href=”http://2-chicks-same-time.info/ms-tv/making-tax-digital/”]
To discuss any of the issues raised in this report or to find out more about how we assist agricultural and rural businesses please get in touch with Tracey Richardson on 01539 729727.