Ahead of the Budget, SLE wrote to the Chancellor, Rachel Reeves MP, urging targeted measures to ease pressures on rural businesses – including relief from punishing National Insurance contributions for small companies and the broadening of VAT relief on renovation works that improve energy efficiency.

In the Budget, the Chancellor confirmed a new mileage-based charge on electric vehicles from April 2028 – a change that will fall disproportionately on rural motorists, who typically depend on longer car journeys due to limited public transport options.

Also included was a reduction in the corporation tax writing-down allowance (WDA) main rate from 18% to 14% from April 2026 – a move the OBR has warned could slow investment.

SLE expressed particular disappointment that the UK government has made no concessions on its proposals to increase inheritance tax on agricultural and other business property, other than to allow the £1 million threshold to transfer between spouses, with changes still set to come into effect on 6 April 2026.

Cameron Gillies, head of external affairs at Scottish Land & Estates, said: “This is a Budget that offers very little for rural Scotland.

“Rural Scotland has enormous economic potential that is ready to be unlocked, yet the UK government continues to reach for higher taxes rather than policies that stimulate growth. There is almost nothing in today’s announcement that will encourage fresh investment into rural areas.

“Rural motorists – who often have no alternative but to travel long distances – will be hit hardest by the new mileage-based tax on electric vehicles. While we welcome the fuel duty freeze until next September, the EV mileage change risks discouraging the very transition to EVs that government wants to see.

“The cut to the writing-down allowance is expected to raise £1.5bn for the Exchequer, but only by slowing down essential investment, particularly in new equipment and machinery. It is yet another example of reliefs being steadily eroded – down from 25% in 2009 – at a time when businesses need certainty and support.”

Mr Gillies continued: “There is also very little in this Budget to support SMEs – the backbone of rural Scotland’s economy.

“Rural areas have a higher proportion of small employers and non-corporate businesses, particularly family farming partnerships and trusts. Yet these are precisely the business structures excluded from the few remaining incentives aimed at ‘business’, such as full expensing for capital allowances.

“The Chancellor has failed to recognise the disproportionate disadvantage facing rural SMEs. This can only widen the rural-urban economic divide and constrain the national economic growth that government says it wants to deliver.

“The farmer protest at Westminster today underlines the deep frustration across the sector about the government’s approach to inheritance tax on agricultural and other business property. While we welcome confirmation that the £1m inheritance tax threshold will be transferable between spouses - a measure we argued for - the wider process has been characterised by a lack of listening and meaningful engagement with rural businesses.

“The OBR forecasts that these changes will raise just £500m a year by 2029 – a marginal sum for the Treasury, but one that risks placing family farms, many of which have been owned for generations, in jeopardy. In doing so, the UK government is placing the resilience of the UK’s food production and food security at unnecessary risk.

“SLE will now look ahead to the Scottish Government’s Budget in mid-January, where we hope to see greater recognition of the opportunities for growth available in rural Scotland.”