George Osborne has announced that farmers are to be allowed to average their incomes for tax purposes over five years.

The Chancellor announced the change in the policy - which was pushed for by the NFU - in his 2015 Budget this afternoon (18 March).

The move - labelled 'fantastic' by the NFU - gives growers three extra years in which to average their profits for income tax purposes.

Elizabeth Truss, environment secretary, said that over 29,000 farmers will benefit from the change, which comes into effect in April 2016, with an average gain of £950 a year.

Elsewhere in the Budget,Osborne announced that end-of-year paper tax returns will be scrapped in favour of 'real-time' online accounts by 2020; froze petrol duty, and scrapped September's proposed increase; offered a renewedcommitment to deliver ultra-fast broadband to all homes; andrevealed that from 2018, vans will only pay £5.40 to cross the Severn Bridge into Wales – the same amount as cars and caravans, and down from the present rate of £13.10.

Allan Bowie, NFU Scotland president, said: “Importantly for Scottish farmers, the Chancellor has recognised that farmers are the hardest hit by volatile markets and prices, and therefore the announcement that incomes will be averaged over five rather than two years is very welcome.

“Simplifying and streamlining the system for annual tax returns is an innovative move which will be of value in reducing the amount of paperwork many farmers running small businesses endure year-on-year.

'However, the Budget also acknowledges that provision of sufficient broadband in an increasingly digitised world is not up to scratch and the ambition to get Britain online must match the reality. NFUS supports the government’s revised national ambition to bring 100MB ultrafast broadband to all homes in the UK, but challenges the government to go further and work much more closely with Scotland’s more rural communities to deliver a level of service comparable with the UK’s urban centres.'

Labour leader Ed Miliband said Osborne had 'failed working families' with his Budget.

Twitter reacts to Osborne's farmer deal

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