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'INCOME SHIFTING' TAX PLANS WILL HIT FARMERS AND SMALL BUSINESSES

February 27, 2008 3:00 PM

Local MP Tim Farron expressed his concern today that farmers and other small businesses will suffer from new taxation plans being introduced by the Government. The Government hopes to raise £200 million a year by preventing income shifting within family-run companies.

Tim Farron said said:

"I am particularly worried about the impact of this on farmers. Most farms are family-run businesses, with a husband-and-wife team and their children also often contributing. Their business is extremely variable, depending on the seasons, the weather, food prices and tourism.

"It will be extremely difficult for them to comply with these new Government regulations. Each farm will be required to maintain time sheets and account for the value of the work undertaken by each member of the business. That would include everything from ploughing a field to serving a B&B breakfast.

"Small businesses already face a huge regulatory burden. The excess of red-tape is overwhelmingly the biggest complaint that I hear from small businesses in my constituency and elsewhere.

"Complying with the new Government policy on income shifting will take up significant amounts of extra time for businesses like farms. They will almost certainly also incur additional costs in accountancy fees. The Government estimates that this measure will raise £200 million annually and will have negligible costs to administer. I would be surprised if that amount of revenue is raised and I expect the cost of collection to escalate."