Farming and landowners’ groups have written to housing and planning minister Alok Sharma to demand that farm buildings be exempted from a revised tax on new developments.

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 tax would allow government to collect on the increased value of land after the granting of planning permission.

However, farm groups have opposed the new tax, as they claim on-farm developments don’t generally require new infrastructure, like changes to roads; farmers say that, because they generally pay for their own infrastructure, this new farm tax should not be applied to their buildings.

New agricultural buildings are currently taxed under the CIL regime, but farm groups oppose this, and point out that farm buildings are usually built by farmers who intend to use them, as opposed to housing or commercial property developers, whose new developments are constructed to be sold on or rented out for profit.

Last week, the NFU, CLA, Tenant Farmers Association (TFA) and the Central Association of Agricultural Valuers (CAAV) sent a joint letter to the Department for Communities and Local Government putting forward their case and asking that farm buildings be exempted from taxation under the reformed regime.

In their joint letter, the farming and landowners’ groups 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.

Commenting this week, 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.”  

Jeremy Moody, a spokesperson for CAAV, added, “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.”