Monday, December 10, 2018

Industry gives mixed reaction to last budget before Brexit

December 3, 2018 by  
Filed under News & Business

Farm leaders and industry commentators have given a mixed response to Philip Hammond’s last tax and spend speech before the UK leaves the European Union next spring.

The chancellor delivered his autumn budget on 29 October – five months to the day before the Brexit is scheduled on 29 March 2019. It contained some benefits for agriculture but did little to dispel the ongoing uncertainty surrounding the sector.

Mr Hammond announced a new structures and buildings allowance for non-residential structures. He also increased an increaed in the Annual Investment Allowance to £1m – although the rise is time-limited for just two years.

Tax relief

NFU president Minette Batters said the structures and buildings allowance would go some way to meeting the union’s call for tax relief to encourage investment in farm infrastructure. But she voiced disappointment that the investment allowance increase is only temporary.

Ms Batters said: “As we move ever closer to leaving the EU, farmers and growers are still seeking assurances and clarity about the environment they will be operating in. In these times of uncertainty, policies that support sustainable farm businesses are crucial.”

The chancellor also announced a £200m investment to deploy full fibre internet in rural areas. But the Country Land and Business Association said he had missed an opportunity to incorporate 4G mobile connectivity into plans to improve rural economic growth.

The budget contained welcome news for small businesses with an announcement that premises with a rateable value of up to £51,000 will receive one third off their business rates for the next 2 years, and a commitment that rateable values will be reviewed in 2021.

Financial burden

But this was a long way short of the full review of business rates called for by the Countryside Alliance. It had called on the government to address the unfairness of this tax and the financial burden it places on businesses with a large footprint – such as equestrian centres.

Alliance head of policy Sarah Lee said: “This budget has been a step in the right direction to support rural businesses and communities with commitments to a temporary slash in business rates and further funding to deliver much needed digital connectivity.

“However, we need a clear plan to ensure that rural communities are fully ‘Brexit’ proofed, as leaving the EU will only be an opportunity if we give rural businesses and communities the tools they need to compete in this global world.”

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