Worry over timeframe for cladding tax

THE Chartered Institute of Taxation (CIOT) is warning about the challenging timeframe for the post Grenfell disaster Residential Property Developer Tax (RPDT). It has led CIOT to call on the Government to indicate the rate range as soon as possible because it impacts residential development projects under negotiation now. The Government said its priority is to bring an end to unsafe cladding and 1 policy proposal is a new tax on the residential property development sector; the Residential Property Developer Tax. The new tax is time; limited and will apply to the largest residential property developers in relation to the money they make from UK residential development. The new tax will be introduced in 2022 and seek to raise at least �2 billion over a decade, said the Government. The money raised will fund measures to address unsafe cladding.

Marc Selby, Chair of CIOT�s Property Taxes Committee, said:- "We understand fully the need to address unsafe cladding as a priority but we are worried about the lack of clarity on aspects of the new tax Residential Property Developer Tax so close to its implementation. We are concerned that the timescale for developing and implementing a wholly new Residential Property Developer Tax ready for April 2022 is very short, for both the sector to adjust and for HMRC to implement this successfully. The short timescale is of particular concern for developers in the build to rent sector who will be exposed to 'dry' tax charges1 on profits deemed to arise following completion of build to rent developments if the Government's proposals for the new tax are implemented. Ideally this process should extend over a longer period to ensure effective implementation and readiness among companies. The limited timescale for development underlines the practical need to align Residential Property Developer Tax to existing legislation and corporation tax systems as far as possible."

The CIOT said an important practical aspect is that software providers will have little time to design and build a Residential Property Developer Tax module once the design is finalised. HMRC will need to have new systems and guidance in place to administer and collect Residential Property Developer Tax by April 2022.

Marc Selby said- "The rate of Residential Property Developer Tax is not yet announced pending decisions on design. We recognise that the design and rate are linked, but a reasonably firm indication of the rate range as soon as possible would provide some level of certainty as it impacts residential development projects under negotiation currently. If a quarterly payment regime is adopted for Residential Property Developer Tax, a company or group with a 30 April year end could be due to make a quarterly payment as early as July 2021, but without knowing the rate or basis of charge."

The CIOT urges the Treasury to adopt existing statutory or accounting definitions as far as possible in designing the new tax, in accordance with the Government's objective of simplicity and the Office of Tax Simplification's recommendations.

Coalition's call for tougher penalties to be imposed on fly tipping culprits

THE Country Land and Business Association (CLA), together with over 150 Local Authorities and 10 professional bodies, is calling on the Sentencing Council to impose tougher fines and sentences for fly tipping culprits. As part of a proposed review of the Environmental Offences Definitive Guideline (2014), the CLA, working in partnership with a range of local authorities and professional bodies covering (in the North, Lancashire, Merseyside, Barnsley, Doncaster and Sheffield) is calling for tougher action against those who commit this awful crime. Currently, sentences handed down do not always match the severity of the offence committed or fairly reflect the costs incurred by the public purse. This means that punishment for the offence of fly tipping does not act as a suitable deterrent. The CLA, along with the numerous supporting councils and professional bodies from across the UK, is asking the Sentencing Council to consider changes that would mean:-

► Court fines would exceed the cost of Fixed Penalty Notice fines and to include costs incurred by the public purse and the police in bringing a fly tipper to court.

► Costs related to the clean-up of fly tipping on private land and restoration of that land would be included in fines paid by those who are prosecuted.

► If a defendant cannot pay the fine in full, or in part, it is strongly recommended that community based sentences are more widely used and available across all offence categories.

► More use of suspended prison sentences which has been proven to be a strong deterrent to serial fly tipping offenders in Buckinghamshire

► Anyone convicted of a 2nd fly tipping offence is given a custodial sentence rather than another suspended sentence.

CLA Director North Lucinda Douglas, said:- "Fly tipping continues to wreck the lives of many of us living and working in the countryside, and significant progress needs to be made to stop it. It's not just the odd bin bag but large household items, from unwanted sofas to broken washing machines, building materials and even asbestos being dumped across our countryside. Currently, the maximum fine is �50,000 or 12 months� imprisonment if convicted in a Magistrates' Court, but this is seldom enforced. Cracking down on this type of crime will only be achieved if tougher fines are imposed. This is why it�s crucial that the Sentencing Council listens to our concerns, and the signatories of the letter, to ensure the offenders are brought to justice."

Worry over timeframe for cladding tax

Coalition's call for tougher penalties to be imposed on fly tipping culprits

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