The Country Land and Business Association (CLA) has called for a overhaul of the tax system for rural businesses and wants to see a new set of coherent tax rules for farmers.
A simplified tax system for rural businesses could “help unleash the potential” of the rural economy, the CLA told the Treasury.
The organisation, which represents 30,000 rural businesses in England and Wales, submitted its proposals for a new Rural Business Unit as part of its Rural Powerhouse campaign, designed to improve productivity in rural communities.
The proposal 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.
CLA president Mark Bridgeman said the creation of a ‘Rural Business Unit’ will allow for “greater freedom of investment within rural businesses leading to productivity growth and more tax paid to the Exchequer, more income available for environmental protection and conservation, and more jobs to local communities.”
He 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.
“Many farmers are looking to diversify their business to protect themselves from uncertain trading conditions. Government should enable and encourage farmers to take action by making it as easy as possible to adapt their business model.”
He added: “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.
“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.”