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Comments on the emergency budget from Chesterton Humberts


David Hebditch, head of the rural department at Chesterton Humberts, comments on the coalition governments emergency budget announcement and the affect on the rural community:

Measures announced today will have a mixed effect on rural communities and agricultural businesses. Overall, it is a positive budget for a sector which has suffered severely during the recession.

Although the budget overall will be decreased by 25% by 2014/15, most farmers will be unaffected as the majority of support payments from DEFRA and RPA are European funded. Were hoping that any direct savings made from the DEFRA budget will concentrate on streamlining back office services rather decreasing funding for farmers.

Reducing corporation tax by 1% each year will only affect a small percentage of farmers running their businesses as limited companies although this may encourage more farmers to run their operations this way, especially with the incentives for employers starting businesses outside of London, the South East and the Eastern region.

The increase in personal income tax allowance by 1,000 will benefit lower paid farm workers this should add stability to the rural workforce.

Reinstating favourable tax rules for furnished holiday lettings will be well received by farmers who have diversified and rely on this as a supporting income stream.

The fall in capital allowances for plant and machinery assets from 20% to 18% will add an additional cost to progressive farm businesses who are planning to invest in new machinery.

It is a relief that the increase in capital gains tax is not as high as predicted and that a two tier tax level has been created.  Many famers will fall in the lower to middle bracket and should not be penalised by the 10% increase.

Rural communities will welcome the fact that there have been no further increase in fuel prices and that the coalition government is looking into ways to prevent prices from rising and provide rebates to  rural communities who have been hit hardest by previous increases.

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