Catherine Vickery, rural tax specialist at accountant Old Mill, said she was surprised that taxes were not hiked more sharply. “There were even some extra giveaways, which was amazing.” However, Mr Osborne did announce drastic changes to Capital Allowances, Capital Gains Tax, Income Tax and VAT, all of which would affect rural businesses.

“One of the key changes is the reduction in the Annual Investment Allowance, from £100,000 to £25,000 from April 2012. The writing down allowance for capital expenditure over that level will also be reduced, from 20% a year to 18%.” Although businesses would still receive the same level of tax relief, it would be spread over a longer period of time. “If you do have major expenditure coming up, make the most of your £100,000 annual allowance in each of the two tax years before this change comes into force.”

From midnight yesterday (22 June), Capital Gains Tax (CGT) rates increased to 28% for higher rate taxpayers – considerably lower than the 40-50% rate many expected. Lower rate taxpayers would retain the existing 18% rate, with gains over and above the higher rate income tax threshold of £43,875 levied at the new 28% rate.

“Anyone selling or gifting assets could face higher CGT rates – but those selling an entire business will benefit from the higher band for Entrepreneurs’ Relief,” said Mrs Vickery. The threshold increased from £2m to £5m, under which gains would be taxed at 10%.

Those renting furnished holiday lets were pleased to hear of plans to reinstate tax reliefs like Capital Allowances on furnishings, offsetting losses against other income, and Entrepreneurs’ Relief upon sale of the business. “A lot of people, in the West Country in particular, run holiday lets as a business, and deserve the same tax relief as any other business.”

Another benefit for local businesses would be the planned holiday from National Insurance (NI) for new business enterprises, she added. “Start-up businesses outside London and the South East are to be exempt from NI for first 10 employees, up to £5,000 per person. That equates to a tax break worth up to £50,000 for 400,000 businesses over three years – a valuable encouragement for brave new ventures.”

A £1000 increase in the personal allowance for Income Tax would save lower rate taxpayers £200 a year, while falling Corporation Tax rates, from 28% down to 24% for large companies, and 21% to 20% for small companies, were also to be welcomed, said Mrs Vickery.

However, the increase in Value Added Tax (VAT), from 17.5% to 20% from 4 January 2011, would make the cost of living more expensive. “Given that just a year ago we were at 15%, that is quite a steep rise. It will add to the cost of almost everything, and will make cash flow more difficult for VAT-registered businesses.

“That said, we were prepared for swingeing allowance cuts and steep tax rises in this Emergency Budget. Many of the proposals made by George Osborne were less onerous than expected. Rural businesses now need to ensure they understand the implications of such wide-ranging changes, and take professional advice to mitigate higher tax bills in the future.”

For more information contact Catherine Vickery on 01935 426181, or e-mail: catherine.vickery@oldmillgroup.co.uk.

The firm, which also has offices in Shepton Mallet, Yeovil and Exeter, merged with long-established Devizes accountants LE Bull and Co almost a year and a half ago but has expanded considerably since then and needs a new base to accommodate the increase in staff.

“When we merged with LE Bull and Co in November 2008 we had 12 office-based staff in Devizes, this has now grown to 19 and with a need to increase to 25 in the short term the existing offices are bursting at the seams,” explains Mike Butler, Finance Partner at Old Mill.

He continued, “We are moving to the Challymead Business Park in Melksham, where the modern offices will enable us to continue to grow and provide a home for up to 40 staff.”

Mike says the move will enable Old Mill to provide services to a much wider range of local businesses.

“We will now be able to make our proactive accountancy services available to all Wiltshire businesses, large and small and across all sectors of industry,” he said.

“And with the addition of newly appointed IFA Paul Heaphy we will also look to expand the financial planning team that we set up in the region this summer.”

Paul Neate, the partner in charge of the Melksham office, says although he will be sad to leave Devizes, he is looking forward to the challenges that lie ahead.

“We had spent nearly 18 months searching for an alternative office in town but unfortunately there was just nothing suitable available,” he said.

“We will be very sad to leave our offices in Devizes where I personally have worked for 30 years, but look forward to continuing to provide a high level of service to our loyal existing clients and from that base serving many new friends in the future.”

Old Mill Managing Partner Jolyon Stonehouse comments, “We have been enjoying rapid organic growth, increasing both income and headcount by more than 10% each year since the management buy-out. However we now feel it is appropriate to enhance our business further by merging with LE Bull and Co. Their client base fits well with our own, and they share our philosophy of providing first class client service while being an outstanding place for staff to work. We are excited by the prospect of a Wiltshire office which will help us serve our considerable number of existing clients in the county and provide a base to further grow our business there.”

All members of the staff of L E Bull and Co will be taken on by Old Mill and there are expansion plans for the office as Old Mill introduce their full range of client services.

Paul Neate senior partner of Bull and Co observes “The synergies between the two companies are excellent. We specialise in looking after farming clients and the Old Mill rural services teams are already the leading supplier of accounting services to West Country agriculture.  Our existing clients will be able to benefit from the specialist tax and financial services advice that is part of the Old Mill package. .”

Paul will become a partner in the Old Mill Rural Services team and John Smith, his fellow L E Bull and Co partner, will become the Senior Manager in the Rural Service team.

Old Mill already operates from offices in Shepton Mallet and Yeovil and earlier this year launched a full service offering office in Exeter.