Confusion over woolly tax advice as rural areas pray for relief.

Rural accountants are facing confusion over how compensation for farmers hit by foot-and-mouth should be taxed.

As the government started to pay out money to those who have had animals slaughtered, including a reported #1m to the farmer who had the first confirmed Devon outbreak, accountants said they were still awaiting guidance on how to treat the payments.

‘I haven’t heard any comments from the government yet,’ said Alan Cooper of Horwath Clark Whitehill. ‘The way we treat compensation depends on how the government taxes it.’

Cumbria sole practitioner Deirdre Grant said: ‘I’m assuming it would be taxed but I’m not sure how the taxation will be spread. The fact is we don’t know and I don’t think the government has decided yet.’

An Inland Revenue spokesman confirmed there was no official government line on the topic. ‘We’ve not issued any statements on it,’ he said.

Many businesses in the tourist industry continued to suffer over the Easter break. Other activities, including church services, were also hit.

The Rev John Roden, a Cumbria vicar, above, is forced to disinfect his footwear every time he crosses fields to his church.

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