HUNDREDS of rural businesses are missing out on vital tax breaks and cash management measures that could help them to survive the downturn, an accountancy firm has warned.
Harrogate-based Alison Robinson, a partner of Saffery Champness' Landed Estates and Rural Business Group, said difficulties in accessing bank finance and equity were hitting cash flow for many small and medium sized enterprises (SMEs) in rural areas while many are unaware of the options available to them.
"This is particularly true where landed estates have developed diversified enterprises, effectively as subsidiaries of a main estate business.
"Cash management and the reduction of costs have never been more important and there needs to be a very clear separation in terms of accounting and financial management between traditional estate income and a diversified business such as a farm shop."
Rural firms should discuss fixed interest rates with banks and deal with debtors, she added.
"When access to liquidity is restricted, cash management becomes critical."
"Businesses that are able to aggressively manage their cash usually require less working capital and are able to extend more competitive credit terms than their rivals."
Rural firms should also use existing higher rates of tax relief when buying new equipment and machinery, she added.