The Treasury is being urged to reconsider plans to scrap a major tax break for firms that develop brownfield sites after experts warned it could force more developers to shift their attention to greenfield locations.
Currently, firms can claim exemption from landfill tax for waste that arises from the development of contaminated land.
However, the government has undertaken a consultation on abolishing the tax break and a recent update from HM Revenue & Customs hinted strongly that it would scrap the exemption by confirming it had already developed a series of " transitional arrangements" to be undertaken should the government "decide to proceed with the abolition of the landfill tax exemption".
A final decision is expected to be announced at next month's budget, but experts are urging the government to retain the tax break or risk undermining the financial case for redeveloping brownfield and contaminated sites.
Ian Viney, director at green consultancy WSP Environmental, said that with landfill tax set to rise to £28 per tonne from April, the abolition of the tax break would have a "significant impact" on the business case for brownfield developments.
For example, on a site developing 10,000 cubic metres of waste the abolition of the tax break would add over £500,000 to the developer's costs.
"The government's thinking is that by making waste more of a financial burden it will encourage more sustainable onsite recovery and recycling of waste," he said. "But for smaller sites in particular this is not always possible and, given brownfield sites already have higher development costs to begin with, this could discourage some projects from going ahead."
He added that if the government scraps the exemption, developers working on contaminated sites will have to react quickly to ensure they meet a proposed deadline of 30 November 2008 for receipt of applications for tax-exemption certificates.
The Treasury was unavailable for comment at the time of going to press.
Business leaders urge government to reinvest revenue raised from carbon credit auctions in green initiatives 08 May 2008
As the full impact of Defra's £300m budget cuts come to light, green groups accuse the government of slashing essential business support programmes 27 Feb 2008
Think tank argues investment in forestry protection offers more cost effective and credible means of cutting emissions 27 Aug 2008
Government warns large numbers of firms likely to be impacted by new EU chemicals regulations 05 Jun 2008
As the CBI writes to ministers to protest against the cuts, BusinessGreen has uncovered the full impact of Defra's £1bn budget shortfall on green business programmes 11 Mar 2008
As delegates at African climate change conference are criticised for not offsetting, events management experts insist buying offsets should become standard practice 29 Aug 2008
Proposals to reduce traffic emissions by tweaking insurance options and tackling urban sprawl are on the drawing board 29 Aug 2008
New team to develop Treasury's green policy and manage new Clean Technology Fund 29 Aug 2008
More news
Recent claims from the oil giant's chief executive suggesting tar sand extraction is required to slow the shift to coal may have caught the eye, but as BusinessGreen.com discovers they do not make much sense 28 Aug 2008
With all eyes on the Democrats' convention this week, environmentalists are asking whether it will live up to the green claims of politicians 26 Aug 2008 More in-depth
Post your comment
Send an email to the Business Green editor at feedback@businessgreen.com
