My Full Thoughts on Today’s Budget for the Rural Community

My Full Thoughts on Today’s Budget for the Rural Community

Today’s budget announcement feels like a heavy hit for rural business and property owners across the UK. While rising costs affect many, the impact is especially challenging for those operating equestrian yards, farms, and other land-based businesses already working within tight profit margins. Here’s why this budget could mean significant new hurdles for our rural community.

1. Increased Staffing Costs
For many rural businesses, the budget’s increase in employer National Insurance contributions translates into a substantial rise in the cost of keeping skilled, trusted workers. For example, a typical rural operation with four full-time employees could see costs rise by 8-18%. In a sector where every pair of hands counts, the increased cost of staff could push more businesses to the edge financially, threatening not only jobs but also the livelihoods of families and communities dependent on these businesses​

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2. Capital Gains Tax (CGT) Changes and Their Impact on Sales
For those who may be forced to sell their assets due to financial pressures, the increase in CGT rates on “other assets” creates a further barrier. An equestrian yard, for instance, that doesn’t qualify as “property” could now face a CGT rate increase from 10% to 18%. This not only affects immediate liquidity but also limits opportunities for reinvestment. With anticipated future increases that could align CGT closer with income tax rates, the financial strain on those selling assets will only grow​

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3. Inheritance Tax (IHT) Adjustments for Agricultural and Business Properties
Perhaps the most disheartening change is in inheritance tax relief for agricultural and business assets. Traditionally, family-run farms and rural businesses could pass down property with minimal tax implications, safeguarding generational continuity. Under the new budget, only the first £1 million in value will remain fully exempt; assets beyond that will face a 20% tax, effective from 2026. For many families, this could mean either incurring large debts or being forced to sell portions of their land just to afford the tax. These measures may, unintentionally, jeopardize the very heart of rural communities​

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4. Stamp Duty Adjustments for 2025
The upcoming reduction in the first-time buyer exemption threshold, along with an increase in second home and overseas buyer surcharges, creates further obstacles for rural business owners considering property expansion or diversification. The increased costs could make these moves financially prohibitive, adding yet another barrier to growth in rural economies​

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A Shared Struggle for Rural Continuity

As members of the rural community, these aren’t just economic changes—we feel the impact on our heritage, family legacies, and way of life. Each of these changes represents more than a financial hurdle; it’s a challenge to the continuity of our community’s traditions and livelihoods. The loss of one family farm, equestrian center, or rural business means the loss of a unique history and the contributions of that family to the community.

If you’re facing these financial shifts, now may be a good time to consult with a financial or legal advisor about succession planning and tax strategies. By preparing thoughtfully, we can help ensure the resilience and continuity of our rural way of life, no matter what challenges come our way.