On Tuesday, the Tenant Farmers Association (TFA) urged chancellor George Osborne to “Grasp the land taxation nettle.”

The Chancellor will make his budget announcement on Wednesday. The government’s austerity programme is set to bite deep in this budget, which is being posted as the world economy slows. As Osborne has promised to ‘balance the books’ by 2020, which is now looming uncomfortably close for the chancellor, and the economic climate has taken a turn for the worse, he is expected to announce further taxes for business in the budget and make fewer spending announcements . There has also been speculation that we could see a rise in fuel duty.

As part of a campaign last year, TFA recommended a number of changes to the tax regime, including:

• Restricting the generous 100% relief from inheritance tax currently available to all landlords regardless of the length of time for which they are prepared to let land, only to those prepared to let for 10 years or more.
• Clamping down on landowners using share farming, contract farming, share partnerships and grazing licences as vehicles for tax avoidance..
• Offering landlords prepared to let land for 10 years or more the ability to declare their income as if it were trading income for taxation purposes.
• Reforming stamp duty land tax to end the discrimination against longer tenancies.

TFA Chief Executive George Dunn said “In any discussion about new entrants to agriculture, tenancy length or the role of contract and share farming, tax is by far the biggest driver and yet it has become the elephant in the room which no one wants to talk about.

“The TFA has had productive discussions with the Treasury and DEFRA but I get the feeling that civil servants have put this issue into the ‘too difficult’ pile.  However, the Government must grasp this nettle or else we will see the let sector of agriculture descend over time into a patchwork of short term agreements providing no benefit to new entrants, sustainable land management or in building resilient farm businesses able to deal with economic and climate volatility.”

Mr Dunn added, “At the very least we need the Chancellor to signal a commitment to reform which might encourage a better level of debate and engagement from the private landlord community than we have seen to date.”