Budget: Small Concessions Could Make Big Difference to Farmers

NFU Scotland has written to Chancellor Alastair Darling ahead of tomorrow’s Budget to bring to his attention a number of small concessions which could make a big difference to Scottish farmers.

Union Chief Executive, James Withers has requested that the Chancellor consider the following areas of concern: Agricultural Buildings Allowances (ABA), fuel tax, taxation on self-catering properties, National Employee Savings Trusts (NESTS) and Vehicle Excise Duty.  NFU Scotland also continues to press the UK Government to devolve the animal health and welfare budget, a promise they have yet to fulfil.

NFUS Chief Executive James Withers said:

“Like many other small to medium-sized family businesses, Scottish farmers have been affected by the recession.  Access to borrowings is especially difficult for an industry which has traditionally provided banks with a good and reliable return on loans.  Farmers have proven themselves to be very resilient to difficult financial straits, and the industry has a promising future as farming’s role in producing food, underpinning the rural economy and maintaining Scotland’s landscape is recognised.

“In acknowledging Scottish farming’s current role and future potential, we have urged the Chancellor to consider these comparatively small concessions which could provide farm businesses with a real boost in these economically difficult times.

“Of course, one straightforward deed the Chancellor could perform would be to devolve the animal health and welfare budget to Scotland; something the UK Government promised they would do some time ago and still have to deliver.  While NFUS continues to make separate representations to the UK Government on this matter, we were encouraged to hear from Jim Paice, Shadow Minister for Agriculture and Rural Affairs that a Conservative Government would be committed to devolving the animal health and welfare budget.”


NFU Scotland’s letter raised the following issues with the Chancellor:

  • Agricultural Buildings Allowances (ABA)

NFUS has urged the reintroduction of ABA to encourage investment on farms, highlighting that the subsequent trade would be welcomed by the wider rural economy, in particular the building trade.

  • Fuel Tax

NFUS has called for fuel duty to be reduced and for the UK Government to make use of EU legislation that permits the reduction of fuel prices in rural areas.  NFUS has also requested that the fuel rebate system that applies to other farm vehicles be extended to ATVs as well.

  • Taxation on Self-Catering Properties

Proposed changes announced in the Budget Report 2009 mean that operators of self-catering accommodation will face a greater tax liability from April 2010.  NFU Scotland is concerned about the effects that this decision may have on the viability of many farm businesses that have diversified into holiday lettings and has asked that the Treasury revisit the issue.

  • National Employee Savings Trusts (NESTS)

NFU Scotland welcomes the Government’s introduction of the NEST low-cost pension scheme that will be introduced from 2012. However, the requirement under the NEST scheme that all employees must be enrolled from the first day of their employment must be changed: it makes little sense that migrant workers employed on a seasonal basis are included in the scheme.

  • Vehicle Excise Duty (VED)

The substantial rise in the band G vehicle excise duty rate has had a detrimental impact on farm businesses.  Farm businesses are not able to purchase a vehicle that has lower CO2 emissions and still able to do the job required of it around the farm.  NFUS has asked for an exemption from VED relief for any vehicle used by an agricultural business.


Contact Sarah Anderson on 0131 472 4108


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