Partial victory in Lords for land levy exemption

Charities have won a victory in the fight for exemption from a new land tax that could cost them hundreds of millions of pounds - but the change does not go far enough, according to peers and sector representatives.

After a late-night debate in the House of Lords, the Government has agreed an amendment to the Planning Reform Bill guaranteeing that developments for charitable purposes will be exempted from the community infrastructure levy, a tax on land after it has been given planning permission.

But charities and peers have said that some developments will not be covered - including those that will raise money for a charity rather than directly meeting its charitable purpose - and have promised to fight for a blanket exemption.

Crossbench peer Lord Cameron of Dillington, one of the main campaigners for a charity exemption, said the Government's amendment was too vaguely worded and would lead to challenges in the courts.

"What we need is certainty, and that we do not have in the Government's amendment," he said during the debate. "I still have the feeling that the only people who are going to benefit from it are lawyers and accountants."

Lord Hodgson of Astley Abbots said the amendment would distort the ability of charities to do what they wanted with their land, and was "unreasonable, unhelpful and disadvantageous" to charities rich in land assets.

After the debate, Stuart Etherington, chief executive of umbrella body the NCVO, said: "Charities work with the most vulnerable people in society. It is essential during this recession that the Government introduces a full exemption in this bill. Half measures simply will not cut it."

The Government argued that a complete exemption for charities would breach state aid rules.

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