More on Planning Gain

Simon Fairlie chapter7 at
Mon Feb 19 00:09:46 GMT 2007

Further to my previous  e-mail about Planning Gain Supplement

The relevant document which explains how all this is to be enforced  
is not a DCLG consultation, but an HM Customs and Revenue  
consultation document found at

The most relevant pages are:

Stop Notices: p, 30

No exemptions for socially beneficial residential developments p 33.

(Warning: the document is a 37 page PDF of which about 10 pages are  
completely blank, so if you want to save paper don't "PRINT ALL")

The whole package is difficult to locate and understand, and most of  
it relates to large developers' contributions:  but our "sympathetic  
local authority planner is right: as things are currently phrased,  
the legislation will place a development tax on small scale or  
community developments which manage to get hold of a scrap of land at  
non-development prices and use the increased value from residential  
use of the  site to subsidize affordability, sustainability or other  
social benefits.

The people who are drafting this legislation (which is,  designed  
with the best of intentions to make developers pay back some of their  
profits to society) are not aware that there are some developments  
whose viabilty is based on the fact that planning gain is channeled  
into  providing social benefits. `It is really important that we get  
them to insert a clauseg allowing this to happen.

I don't imagine that many people will have time to trawl through all  
this arcane stuff, so I will be posting Chapter 7's response, and  
would be grateful for submissions to DCLG and HM Customs and Excise  
supporting our response. Nobody else will have cottoned onto this, so  
ten minutes of your time to send a supporting e-mail  will be time  
well spent.

Many thanks


Simon Fairlie
Hats: Chapter 7, The Land,

The Potato Store, Flaxdrayton Farm,
S. Petherton, Somerset TA 13 5LR

01460 249204
chapter7 at

Begin forwarded message:

> From: Simon Fairlie <chapter7 at>
> Date: 18 February 2007 22:19:58 GMT
> To: pnuk at
> Subject: Fight tax on sustainable developments
> Hi folks.
> Chapter 7 received this from a sympathetic local authority planner.
> I have been aware of this problem in theory, but been lazy about  
> attending to it in practice. There is just ten days of the  
> consultation process left , and it would be a very good idea to get  
> as many voices as possible urging that exemptions should be  
> available for developments where planning gain from the aquisition  
> of planning permission  is already channeled  into providing social  
> benefits such as  not-for-profit, affordable  and highly  
> sustainable housing.
> Simon
> Chapter 7
>> Dear Simon,
>> I am preparing a consultation response for my authority to the  
>> current Planning Gain Supplement (PGS) consultations http:// 
>> Are you aware of these? It strikes me that they could have very  
>> significant impacts on low impact developers.
>> In short, PGS is a new centrally administered tax on the uplift  
>> value of the grant of planning permission, which would partially  
>> replace planning obligations (s106), although these would continue  
>> to exist in a scaled-back form. It is the latest attempt at taxing  
>> betterment value. Introduction is proposed no earlier than 2009.  
>> The level of PGS is to be 'modest' and has yet to be confirmed,  
>> but figures of 10-20% are mooted. It would be payable at  
>> commencement of development.
>> I am concerned that this could have devastating effects on the  
>> viability of not-for-profit, socially beneficial and shoe-string  
>> projects including low impact developments. How could they afford  
>> a PGS payment, especially if no future property sale is envisaged  
>> to realise a financial return? The charge could be particularly  
>> high if the project involves a residential element.
>> Going ahead without paying PGS could lead to the issue of a PGS  
>> Stop Notice, making further development unlawful until the charge  
>> is paid. It is in effect introducing a parallel enforcement  
>> system, which could be a double whammy for low impact developers.  
>> Moreover a PGS Stop Notice could be issued for a commenced  
>> development whether or not it has planning permission (see Chapter  
>> 7 of the 'Paying PGS' document). While LPAs use their discretion  
>> in enforcing breaches of planning control, there is no mention of  
>> this for PGS, so it could hit every LID case and result in their  
>> development being unlawful, plus financial penalties (which would  
>> pass with the ownership of the land until paid) and ultimately  
>> prosecution.
>> The current proposals only contain the following exemptions, taken  
>> from the 'Paying PGS' document:
>> "Q. Will all developments need a PGS Start Notice?
>> A. PGS will not apply to small-scale home improvements. Such  
>> developments will
>> not therefore require a PGS Start Notice, even where planning  
>> permission is
>> necessary. This will exclude more than half of planning  
>> permissions granted.
>> Development under the General Permitted Development Order 1995  
>> that does
>> not require planning permission will not need a PGS Start Notice. The
>> Government is still considering thresholds for small-scale non- 
>> residential
>> development."
>> The House of Commons Communities and Local Government Committee  
>> recommended in Nov 06:
>> '21. We find no grounds for PGS exemptions or discounts for  
>> developments of
>> marginal viability. (Paragraph 41)'
>> To which the Government respond:
>> 'The Government welcome this recommendation. Maintaining a broad  
>> scope with a
>> wide base would enable PGS to be levied at a modest rate with a  
>> reduced risk of
>> creating economic distortions or avoidance opportunities.'
>> While betterment is a laudable principle, I think it would be  
>> worth a Chapter 7 consultation response to seek exemptions from  
>> PGS liability for low impact developments, charity projects and  
>> more generally developments of the highest sustainability  
>> standards. My work response can't cover LIDs.
>> The deadline is 28th Feb 07.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <>

More information about the Diggers350 mailing list