Clever Budget Could Ensure More Land Is Let

NFU Scotland has reiterated to UK Chancellor George Osborne its proposal to encourage more land to be let via a tax incentive scheme.

In its UK Budget 2012 submission, the Union has outlined a proposed tax incentive scheme to promote the letting of agricultural land to new entrants as one way of helping to ease the deadlock that is prohibiting them from getting a foothold in the industry.

NFU Scotland’s proposed scheme would give landowners an agricultural business allowance which would be deducted from rental income as if it were a business expense, reducing their tax bill if they let land to a new agricultural business.

NFUS has also stressed the importance of other tax-related issues to the health of the food and farming industries, including a reduction in fuel duty, theimposition of mandatory online filing, inheritance tax relief on tenants’ diversifications, agricultural buildings allowances and annual investment allowances.

NFU Scotland’s Vice-President, John Picken said:

“While the UK, EU and global economy are in a rocky state, governments have to strike a difficult balance between taxing industry and cutting public services while encouraging growth.

“Agriculture and food are two of the economy’s most promising areas of industry, with production on a strong footing and exports growing steadily. Ironically, however, while opportunities abound, it is difficult for new entrants to get started.   Access to land is limited for new businesses, especially if they find themselves competing against established businesses for tenancies.

“Our proposal to provide a tax incentive for landowners to let land to new agricultural businesses would cost the taxpayer very little, as it would only apply in a comparatively small number of cases.   Because of the appetite for enterprise by those wanting to get involved in Scottish agriculture, such a move would quickly pay dividends for the economy.

“The issue of high fuel duty is an area where we are on common ground with the whole of the UK industry, as well as private individuals. Transport and haulage are particularly important for Scottish farming; whether delivering inputs, moving stock, taking produce to the marketplace or distributing food to customers, Scotland, and especially our remote areas and islands, rely on transport as a necessity and not just a luxury.

“Also crucial to all private individuals and businesses small and large, the UK Government must do all it can to ensure that the tax system is as easily to navigate as possible. The requirement to complete PAYE and VAT online sounds good in principle but is impossible for many of our members – and therefore discriminates them – as they have poor or, in some cases, no broadband coverage and have to travel to an area where there is broadband or pay a third party to complete their returns for them.

“Finally, NFUS is also proposing that the Treasury simplify the tax system for businesses and its own administrators when accounting for diversified activity. Currently, each diversification must be accounted for separately, which wastes everyone’s time and money. We are urging the Chancellor to remove this burden on diversified businesses for everyone’s benefit.”


Contact Sarah Anderson on 0131 472 4108


Date Published:

News Article No.: 30/12

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