RURAL businesses in the two counties are largely being ignored by the Chancellor, according to a leading rural business organisation.

The Country Land and Business Association (CLA) claims the recent budget focused on incorporated businesses at the expense of unincorporated businesses, many of which "manage the natural resources and habitats of the countryside".

The association, which has almost 2,000 members in Herefordshire and Worcestershire, said these businesses could make a "big difference" if there were some simple changes made.

"The CLA has sent a tax report to the Treasury saying that the countryside could make a big difference to the economy by simple tax changes to agriculture and rural businesses," said Frances Beatty, regional director for the CLA.

Swept aside

The report, Reform to Perform, argues that antiquated tax anomalies need to be swept aside to help create new, sustainable enterprise in the countryside.

"The recent budgets concentrated help to incorporated businesses, yet three million unincorporated businesses - many of which manage the natural resources and habitats of the countryside, provide jobs and rural housing and generate tax revenue - were largely ignored," continued Mrs Beatty.

She said rural businesses needed a tax system that recognised the mixed nature of rural business, a tax structure to encourage rural diversification and rural entrepreneurship and recognition for expenditure, without subsidy, to manage the countryside for the benefit of the public.

"Some of our proposals are radical and far-reaching, such as our first recommendation to remove what we see as outdated boundaries in the tax system between different economic activities," said Mrs Beatty.

"Businesses need to integrate management of land, buildings and other assets to generate jobs and incomes.

"Other proposals are more specific but could have an immediate effect in removing some of the barriers that are hindering diversification of rural businesses - including those with tenanted holdings.

"For diversification to flourish, entrepreneurs must be sure that diversification does not, of itself, lead directly to a tax disadvantage.

"We also make recommendations to encourage expenditure on environmental management of assets, recommendations that will be of interest not only in a rural context, but in urban areas too.

"The prize for removing these anomalies is huge - greater job opportunities, greater profitability and, in turn, higher tax revenues, greater investment in regeneration and increased commitment to environmental land management."