New rural taxes would "damage the rural economy"

Arundel & South Downs MP Nick Herbert has attacked proposals for new rural taxes, arguing that once again rural areas are being used as a cash cow for the Treasury.

 

The Lyons Inquiry into Local Government, which was published at the end of last month, not only recommends higher council tax bands, regular council tax revaluations and new bin taxes, but also contains proposals to impose new taxes on rural communities.

The small print of the Lyons Inquiry reveals plans to levy business rates on agricultural land and buildings, something which has not been done since 1929. 

In his report, Sir Michael Lyons writes that "there would seem in principle to be little reason to maintain the special treatment" of agricultural land.

He acknowledges that the levy could raise anything up to £300 million for the Exchequer and that "the impact of taxation would also be to reduce the capital value of agricultural land".

Any such tax on farming, and a subsequent fall in land values, would come at a time when farm incomes have dropped by over 10 per cent in the last year alone and would have a further detrimental impact on the industry.

Many farmers are still struggling to recover from the Single Farm Payments fiasco which saw businesses put in jeopardy as a result of delays and general incompetence in the validation of claims and the handling of payments.  At the height of the crisis farm debts were increasing at a record rate of £13 million a month.

The removal of the exemption from business rates on agricultural fields and outbuildings could also see many farmers facing the double whammy of having to pay council tax and business rates on their home properties.

All rural homeowners could be hit by the Lyons Inquiry's proposal for regular council tax revaluations.  The average detached house in West Sussex now costs nearly £380,000.

A Freedom of Information Act request by the Conservatives of the Valuation Office Agency's revaluation handbook demonstrates how many rural properties will be liable to much higher council tax.

The handbook outlines special ‘value significant' codes to record and tax rural properties, gardens, outbuildings, patios and even views - all features which many West Sussex properties enjoy and which will push homes into higher council tax bands and, therefore, increase council taxes. 

Nationally, the average council tax bill has already doubled since 1997 - increasing at three times the rate of inflation and twice that of average earnings.  In West Sussex, the average Band D council tax now stands at nearly £1,400.

Commenting, Nick Herbert said, "Proposals to levy business rates on agricultural land and property are unacceptable, particularly when farmers have had such a rough time in recent years.

"If these plans are adopted I'm afraid that they would confirm that the Government has no understanding of rural areas.  Once again, it seems that we are being used as the Treasury's cash cow."

Ends

Joe Coombes