The UK Government is writing to anyone who owns or operates an anaerobic digestion plant to determine whether they should pay higher business rates.

This is a property tax levied on all non-domestic real estate and it currently contributes some £25bn to the public purse.

The tax is levied by the government’s Valuation Office Agency (VOA). This department has recently made some changes to the complex formula they use to calculate business rates – and their letter to anaerobic digestion plant owners includes up to 20 detailed questions, with the answers being fed into new business rate calculations.

These are likely to lead to higher business rate tax demands.

In response, a group of 75 farmers and other asset owners or operators has sought legal advice and is preparing to challenge the VOA over its new formula. The group is growing and actively accepting new members – contact details are below for anyone who wants to join.

The group will initially make a formal challenge to the VOA. If the latter contest the challenge, the group will look to refer the matter to the third party tribunal for a decision on an appropriate level of tax. This is a process that could end at the Upper Tribunal (Land Tribunal) – an expert tribunal set up to resolve high level disputes about the value of land and buildings.

Chris Handel, managing director of Handel Rating Consultants, is a leading adviser in the rates-for-renewables sector. He is organising the formal challenge – and comments:

“The government has changed the way they work out business rates and they’re gathering the information they need to trigger higher payments from anaerobic digestion plant owners.This tax rise feels counterintuitive at a time when we need to all green the economy.

“Moreover, the UK’s 579  anaerobic digestion plants are nearly all on farms and that puts famers right in the firing line. Do they need higher tax bills? The government promised “a better, fairer farming system” only six months ago. This latest move may leave a nasty taste in the mouth.

“I’d urge anyone receiving one of these letters to consider two things: firstly take professional advice, don’t just fill in their form. It could lead to higher tax bills. Second, think about joining our group challenging the government.”