Conclusions and recommendations
Information on land values
1. We
are disappointed that Valuation Office Agency, having identified
problems with the effectiveness and application of the data underpinning
the land price indices, chose to cease publication rather than
tackle these issues. We repeat out recommendation that publication
of the indices resume in order to allow informed debate about
public policy on land and land ownership.
(Paragraph 7)
Conditional Exemption Tax Incentive scheme
2. Those
benefiting from the Conditional Exception scheme do so to enable
the preservation of UK heritage assets. These assets are listed
and owners must allow public access but information on how much
revenue is forgone as a result of each of the tax exemptions is
not made public. It is difficult to see how a meaningful consideration
of the efficacy and value for money of these exemptions can take
place without greater transparency. (Paragraph 13)
3. We recommend
that the incoming Government brings forward proposals to improve
the provision of information on the Conditional Exemption scheme
and its costs to the public and to consider its value for money
as this is not proven at present.
(Paragraph 14)
4. Where part of
the undertaking given by land owners, such as public access, is
already required by law a partial, rather than total, exemption
may be more appropriate. We recommend that, if the value for money
of the Conditional Exemption scheme as a whole is proven and the
scheme is retained, the incoming Government brings forward proposals
to introduce graduated exemptions that reflect the unique benefits
that tax payers are gaining from the scheme.
(Paragraph 15)
Agricultural land
5. The
tax system can be used as a policy lever. In the case of agricultural
land, the available tax reliefs seem to be intended to encourage
productive use of farmland and prevent the break-up of family
farms. However, due to a lack of oversight by the Treasury and
HMRC, it is not clear to what extent either Agricultural Property
Relief or exemption from non-domestic rates are having the desired
impact and whether there are any unintended consequences arising
from the reliefs available to agricultural landowners. (Paragraph
20)
6. We urge the
incoming Government to set out the rationale for Agricultural
Property Relief and undertake a review of whether the relief is
achieving its purpose. At present the case for its retention is
not proven. (Paragraph 21)
Tax reliefs and the cost of land
7. We
are disappointed that the attitude of HMRC to the question of
whether or not tax reliefs push up the price of agricultural land
can best be summarised as 'don't know, don't care'. It is important
for both the UK and Scottish Governments to consider whether parts
of the tax system are pushing up land prices and undermining a
commitment to increasing community land ownership. (Paragraph
26)
8. We recommend
that the incoming Government undertake an analysis of the impact
of tax reliefs on land value and that they include this information
in their consideration of which tax reliefs should be retained
and which should be abolished. (Paragraph
27)
Administration of tax reliefs
9. We
are disappointed that despite the work done by the National Audit
Office and the Public Accounts Committee there still seems to
be considerable reluctance on the part of Government to accept
the need for proper oversight and scrutiny of tax reliefs and
exemptions. These reliefs mean that tax income is forgone in order
to support policy objectives and they should be open to the same
scrutiny as other government spending. (Paragraph 33)
10. The Government
must ensure that both new and existing tax reliefs are properly
monitored and assessed. The case for their retention is not proven
at present. The incoming Government must ensure that those tax
reliefs where value for money and effectiveness cannot be demonstrated
are abolished. (Paragraph 34)
Common Agricultural Policy
11. It
is too early to assess the impact of the new schemes but we welcome
efforts to encourage new entrants to farming through the Common
Agricultural Policy. (Paragraph 36)
Tax planning
12. We
welcome the introduction of a publicly available register of people
with significant control of a company as the first step in unpicking
complex ownership arrangements used by some individuals and companies
to avoid their tax obligations. We are, however, disappointed
that the Government has stopped short of ensuring public access
to information on beneficial ownership of land held by trusts.
(Paragraph 44)
13. The incoming
Government must ensure that information on beneficial ownership
through trusts is made publicly available.
(Paragraph 45)
The work of the Scottish Government
14. Tax
reliefs represent a cost to the public due to the tax income forgone.
It should be a guiding principal that both new and existing tax
reliefs should only be offered where there is a clear justification.
The case for many tax reliefs is still to be proven. The incoming
Government should ensure that those tax reliefs where a clear
and proven benefit cannot be demonstrated are abolished. (Paragraph
51)
15. We reiterate
our call for the UK Government to improve the oversight of tax
reliefs. The UK and Scottish Governments should to work together
on areas of shared interest, such as land tax reliefs in order
to ensure a tax system that supports the Scottish Government's
stated aim of increased community ownership of land.
(Paragraph 52)
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