Budget 2015: Farmers granted tax relief

George Osborne, holds up his budget case for the cameras outside number 11 Downing Street. Credit: HM Treasury (Flickr)

UK farmers will now be allowed to average their income for tax purposes over five years, Osborne has announced in his latest budget.

In his Budget Speech the Chancellor said: “The fall in food prices is good for families; but it reminds us of the challenge our farmers face from volatile markets.”

“The National Farmers Union has long argued they should be allowed to average their incomes for tax purposes over five years; I agree and in this budget we will make that change.”

Up until now, farmers have only been able to average their profits over two years, resulting in large tax bills.

The tax averaging was a key issue in the NFU’s election manifesto for 2015 and follows on from the lobbying of government by its members.

NFU President Meurig Raymond said: “We are very pleased that Mr Osborne said that he had listened to the arguments by the NFU. As he mentioned in his speech, farmers are increasingly facing a volatile marketplace and this will enable them to manage the impacts of this.

“News that the annual investment allowance will be addressed in his Autumn Statement is also welcome. As [Mr Osborne] mentions, £25,000 is not an acceptable level which would encourage on-farm investment and we will await further announcements with interest.”

The tax change will come into place from April 2016.

Local Government Politics

National government, the criminal system and the local government are all separate.

Local politicians are councillors in their wards; national politicians are MPs in charge of their constituency.

The hierarchy of a single- tier and two-tier system of local government

Most powerful: County Council

City/District Council

                             Parish Council

The councils are collectively known as local authorities. Single-tier councils or unitary authorities – a combination of district and county councils in both funds and power – are responsible for all local authority services and functions. Whereas a two-tier system divides the responsibility between district and county councils not united under one power.

More than two million people are employed by local authorities in the public sector; these include teachers, social services, the police, fire fighters and other office and manual workers. Education is the largest locally provided service in the country.

The Government Act 2000 changed the layout of local authorities to produce the cabinet system to familiarise local government with national government. We can report on council meetings because there is privilege subject to contradiction or explanation i.e a balanced package.

Local authorities are funded by a mixture of central government grants, council tax and income tax. Council tax provides 75% of local authorities’ total funding; they set the amount of tax on how much they need to raise based on the annual overall budget. District councils collect this tax but the central government has capping powers to ensure local authorities do not impose excessive increases.

Councillors make decisions on behalf of their local community, agreeing on the budget and setting a policy framework. Their decisions however, in terms of the budget, are ring-fenced by the central government on how spending should happen on specific services. Councillors are elected for a four-year term from a ward by the local people – not being paid but claiming expenses to carry out their public duties. They are not employees of the council but merely policy providers for the paid employees to put into practice.