Calls for development tax exemption on new builds

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The NFU, CLA, TFA and CAAV have sent a joint letter to Housing and Planning Minister Alok Sharma calling for new farm buildings to be exempted from a revised approach to development tax for local infrastructure.

Developers are already charged a Community Infrastructure Levy (CIL) when planning permission is granted to build residential and commercial units. Following a review of the system, recommendations have been made to the Government for a revised process called the Local Infrastructure Tariff (LIT). The new approach is causing concern among the rural organisations who say it is a tax on farm planning applications which do not generate the need for infrastructure. They say that because farmers pay for their own infrastructure this new farm tax should not be applied.

In the letter, the organisations say that in areas where a CIL is charged on new farm buildings, “the requirement to pay a substantial CIL charge has actually stopped farm development from taking place”. They argue that being included in the LIT will have a similar effect and cause financial strain for farm businesses. As a result they have called for a national exemption from development contributions.

The letter explains: “Most agricultural buildings are erected for the purposes of agriculture on the holding…a fundamentally different approach from most commercial buildings or housing developments which are built by investors for selling or letting. A new agricultural building will not result in an increase in capital value and so any CIL or LIT charges will have to be funded by farmers from loans, repaid from the increased revenue expected from the development over future years. The cost of servicing the loan will be an additional direct cost to the farming business and will be paid out of fluctuating farm incomes.”

NFU Vice President Guy Smith said: “The NFU is concerned that regulatory systems, including the planning system, should encourage farmers to upgrade their farm buildings and operations, so they can run efficient farm businesses, meet regulatory requirements and improve environmental and animal welfare standards. Farm operations meet their own infrastructure needs and should not have to face unconnected development taxes.”

CLA President Ross Murray said: “A tax aimed at housing and commercial development is simply inappropriate for new agricultural buildings. It restricts rural economic growth and prevents investment in new farm buildings which undermines competitive agriculture.

“Long-standing government guidance suggests that agricultural buildings are not buildings into which the general public normally go but this is being ignored by some local authorities when setting up their CIL charging schedules. It is vital for the Government to step in and decisively exempt them from CIL or the proposed Local Infrastructure Tariff.”

TFA Chief Executive George Dunn said: "In the context of Brexit when we need farm businesses to be investing to build efficiency, productivity and resilience the Government should not be seeking to discourage this through the imposition of ill thought through levies on new farm buildings.”

Jeremy Moody, secretary and adviser to the Central Association of Agricultural Valuers (CAAV), said: “We are concerned that the particular issues of large scale but low value farm buildings have not been properly considered in this review. The aim of the LIT is to capture a slice of the increase in value when you erect a building but there is virtually no increase in value with agricultural buildings.”

Click here to view the letter.


Last edited on: 09:08:2017

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  • Posted by: Albert BullPosted on: 10/08/2017 09:02:56

    Comment: Is this Gove and his mates trying to cane the small Farmer? This would be a complete reversal of the 40% grant payable in the past to renew old out of date buildings. What about giving a proper tax allowance on new buildings like that given to imported machines.
  • Posted by: R I FreemanPosted on: 10/08/2017 17:15:58

    Comment: I am considering putting up a new farm building to deal with the problem of growing three crops on the farm due to the RPA's three crops rule. So the government, with legislation, forces arable farmers to grow three crops and then charges an extra tax for the necessary storage. What a scam !
  • Posted by: R PlaylePosted on: 18/09/2017 19:46:44

    Comment: I have been watching this closely and am not at all happy if we on our permanent grass farm of 450 acres are made to pay a tax if we try to invest in a new farm cattle and fodder storage shed .. We are duty bound not to over poach our fields during the wet winter months so we want to get our older cattle in under a roof for their welfare and to keep their summer /late autumn condition on them so we can market them at the right time instead of them living of their backs in the winter months ,a lot of our fields are in Country side stewardship which restricts us from supplementary feeding as well !!.. To stay competitive and to keep the farm going along the near organic way we want to farm we need a new barn or two for the reasons shown above ,the cost of these barns is already nearly beyond our reach as it is let alone paying for the concrete floors which I feel we might have to forgo for a few years ...So I am very pleased to see the bodys representing us fighting these two taxes on our behalf ..Thank You

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