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The government has announced it is deferring the collection of taxes for those facing "severe difficulty" as a result of the current foot and mouth outbreak.

HM Revenue and Customs (HMRC) has also suspended compliance checks and investigations for farmers and other businesses affected by the outbreak and set up a helpline to offer advice on tax matters to those hit by the crisis.

"HMRC appreciates that some individuals and businesses will find it difficult to meet their tax obligations to us due to the recent foot and mouth outbreak," the department said in a statement.

While some businesses unable to make taxation payments due to the impact of foot and mouth will be granted a deferment, others will be given the opportunity to pay what they owe in installments.

Debt collection proceedings have also been suspended for affected businesses, while the government has also pledged to consider abandoning powers to charge interest and surcharges on tax paid late "where appropriate".

Commenting on the announcement economic secretary to the Treasury Kitty Ussher said: "We want to offer help to people who are being affected by the outbreak of foot and mouth disease and the restrictions on the movement of livestock.

"Some of them may be facing cash-flow difficulties and our new helpline will be able to offer them fast, practical advice on their tax affairs," she added.

Meanwhile some analysts have claimed that the economic impact of the current foot and mouth outbreak should be limited, providing measures have been put in place quickly enough to present the disease spreading.

"Agriculture in total only accounts for around one per cent of UK GDP on the output side and so far there is only a very small area that seems to have been affected," explained Global Insight chief economist Howard Archer.

"Obviously, if the disease spreads markedly, the overall impact on the economy will increase, but even then it should still be pretty limited assuming that the lessons learned from six years ago prove effective," he added.

The last foot and mouth outbreak in 2001 cost the UK economy an estimated £8 billion.