A few headline points for the rural economy from today’s budget, to add to the mainstream reporting:
- Deeds of variation for Inheritance Tax: a consultation is to report by Autumn. It is therefore important to pursue any deeds of variation which may be needed straightaway, and to review wills to ensure that deeds of variation will not be required. Their days may now be numbered.
- No more tax returns: sounds good, but will digital tax accounts be any better?
- Annual Investment Allowance. It won’t come down from £500,000 to £25,000 after December this year. We will be told in the Autumn statement what the new rate will be. This timing is more appropriate, says Osborne. Two months’ notice? More appropriate? So much for a long term view on business investment needs.
- Compulsory Purchase Reform/Review: consultation now issued, responses by June this year. First impression: more tinkering, much like the story of piecemeal reforms since the Land Compensation Act 1973. Key points seem to include earlier payment of compensation (ahead of entry); better compensation; more encouragement to pay ‘over the odds’ to avoid other problems in the acquisition process; reconsideration of the ‘material detriment’ provisions. There doesn’t seem to be much on blight, either statutory or discretionary and more generally on the interests of property owners and occupiers who lose no land but whose interests are badly affected by public development.
- Local Enterprise Partnerships and Forestry: who will LEPS be forced to marry next at the muzzle of a shotgun? £1 million for for forestry schemes which are brought forward with LEP support – not one to hold your breath for.
- Rural broadband (an interesting concept): a universal service obligation of 5 Mbps everywhere may facilitate satellite access. Details are far from clear, but vital to the successful delivery of this.
- Farmers’ profit averaging: the averaging period extended from two years to five year with effect from April 2016. How will this work? We don’t know yet: consultation is to follow.
- Flood Defence Relief: for expenditure against Income Tax or Corporation Tax – an interesting possibility to consider in the context of the development of ecosystem services. For example Farmer A will manage his riverside fields to accept surplus water in order to protect Manufacturer B’s factory. Will B be able to get tax relief for the money he pays to Farmer A for this purpose?
- Subletting within residential tenancies: needs thinking through but apparently tenants may be able to override restrictions in their leases. Form an orderly queue ….
- CGT Entrepreneurs’ Relief: various loose ends to be tightened up. An ideal headline for scaremongering but unlikely to be of concern to ‘genuine’ cases.
How seriously should we take all this? Paddy Power are offering the following odds on the next government:
- Labour minority 3/11
- Conservative minority 7/2
- Conservative majority 9/2
- Labour SNP Coalition, and Conservative Lib Dem coalition 5/1
Whoever wins there will be another budget early in the new Parliament. That’s really the one to watch for rather than today’s dying embers. Let’s hope the big Agincourt party survives the general election – never mind the charisma of Henry IV’s speech (as Shakespeare would have it anyway) but do remember the skill and discipline of the English and Welsh archers. Could this be George Osborne’s silent blow against UKIP?