George Osborne's 2014 Budget fails to benefit unincorporated rural businesses such as farms, the Country Land and Business Association (CLA) has claimed.
The organisation believes that while the chancellor remarked on the beneficial effects of a corporation tax rate reduction to 21 per cent from April 2015, this will not benefit all rural businesses.
CLA president Henry Robinson, said: “A high proportion of rural businesses are unincorporated, and run by individual sole traders or family partnerships.
“This means their business profits are subject to income tax, the rates of which can be significantly higher than corporation tax. If these businesses could benefit from similar tax rate cuts, they too would be able to invest more and raise productivity, thereby helping the economic recovery.
“Instead, the tax burden on unincorporated businesses has increased since 2010 as a result of increases in the rate of income tax and withdrawal of capital allowances. These companies are less able to invest out of retained profits.”
He added that farmers and rural businesses contribute significantly to the economy and deserved more support from the chancellor.
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