Tax hits building costs
A PROPOSED new tax on the extraction of aggregates will increase farm building costs and cut the price that extractors are prepared to pay for mineral rights.
"With rural enterprises already suffering reduced incomes, the last thing farmers and landowners want is a new tax which depresses the capital value of their land," says John Turnbull-Kemp, a VAT specialist with chartered accountant Morison Stoneham.
The government argues that the tax is justified on environmental grounds. Unless extractors come forward with satisfactory voluntary measures, the tax is likely to be announced in the Chancellor of the Exchequers pre-Budget report later this year.
"It is proposed that the new tax will cover crushed rock, sand and gravel. Secondary legislation may keep exports, silica sand, lime and other minerals free of the tax," says Mr Turnbull-Kemp.
He advises all rural enterprises potentially affected by the new tax to lobby their MPs. *