Measure for Measure

Philip Meade has published a post on his Dispute Resolution blog which serves as an excellent reminder of some of the good practice surveying basics: points which are just as useful to a trainee or newly-qualified surveyor as they are to an experienced arbitrator.  I’m delighted to reproduce it below:

Despite our professional roots in land surveying it is not uncommon as an arbitrator to come across valuation disputes in which the precise location and extent of the original problem is far from c…

Source: Measure for Measure

80% of tied cottage occupiers could face tax on empty bedrooms

Thank you to everybody who responded to my survey on tied housing.  I have now offered the following observations in response to the HMRC consultation’s suggestion that the tax and National Insurance treatment of tied housing as a benefit in kind should be based on its full rental value.

The suggestion that all employer provided accommodation should be taxed on the basis of its full market rental value could therefore have significant implications for [rural] occupiers, many of whom are likely to be at the lower end of the pay range.  This in turn is likely to lead to greater pay pressures on employers at a time when there is no sign of agricultural volatility decreasing and when those same employers are facing the additional costs of extended pension rights etc.
It is also worth highlighting the contrast with Local Housing Allowance (LHA) and Housing Benefit (HB) if the proposal to move to full rental value were to go ahead.  LHA and HB are both restricted according to the number of bedrooms the occupier is deemed to need and LHA is further restricted to the lower level of rent prevailing in the district.  80% of the respondents to my survey would find their entitlement restricted if they were LHA or HB claimants, yet would almost certainly find it impossible to move to alternative accommodation without changing their job.

The online survey was undertaken between Monday 4 January and Tuesday 2 February 2016 using SurveyMonkey. No attempt was made to define a particular population beyond occupiers of employer provided living accommodation generally, with attention drawn to the survey via social media (twitter, LinkedIn, charlescowap.wordpress.com) and direct approaches to contacts in the rural economy. I cannot claim that the survey is representative of a particular group, nor that the results should therefore be treated as compelling. It does however provide a persuasive insight into the housing arrangements for people employed in some sectors of the rural economy.

Key findings:

  • Number of respondents: 25, all of whom live in accommodation provided by employers
  • Twenty pay no rent for their accommodation (80%), while five pay some rent (20%). Nobody claimed to pay full market rent.
  • Size of accommodation ranged from one to six or more bedrooms, Table 1

Table One: Number of bedrooms

Number of bedrooms Number of dwellings
1 2
2 4
3 5
4 8
5 4
6 or more 2
Total 25

 

  • The twenty five dwellings were occupied by a total of 70 people, ranging from single occupiers to couples with one or more children.
  • One respondent worked in education. Most respondents (n=17) worked on rural estates and seven occupiers worked in agriculture. There were no respondents from the forestry, licensed trade, security, other estate or property management or finance and banking sectors.
  • Two respondents paid Income Tax or National Insurance on the value of their accommodation but the majority did not (n=19, 76%). One respondent did not wish to answer this question and a further three did not know.

The data were further analysed as to the suitability of the accommodation for the size of the family unit living there. This was done by reference to the qualifying bedroom criteria for Local Housing Allowance and Housing Benefit.

  • Of the 25 households, twenty would have had their entitlement to benefit restricted due to an excessive number of bedrooms. This would have affected 58 of the 70 people covered by the survey. Examples of those excluded included:
  • 10 out of 11 couples in the survey occupying property of two or more bedrooms;
  • Two couples with children over 16 occupying houses with more than four bedrooms;
  • Two couples with one child under 16 occupying houses with more than three bedrooms.

One respondent who had lived in employer provided accommodation offered the following observations in response to the survey:

“Having lived in service accommodation for many years I’d comment:

1 In accepting a position where I was required to live in service accommodation to meet my contractual obligations I had no choice in the location (edge of pig farm)type of housing, nearby education, or standard of maintenance and external environment

2 There is an implicit and unpaid expectation that there will be a significant and unpaid additional labour contribution – unlocking for out of hours lorries and loading/unloading, telephone, attending sick animals

3 Additional taxation of such housing as a benefit could break that relationship and would require an employer to pay more for out of hours service

4 We never thought of service accommodation as a benefit, but a liability, knowing that when job terminated we would have to move so saved and invested every penny to buy a flat first, then a house, for long term security” (Mr John Stones, former director Nuffield Farming Scholarships)

Implications

Questions 9 and 10 of the HMRC Consultation, Employer Provided Living Accommodation, Call for Evidence (January 2016) ask what proportion of employees provided with accommodation pay rent, how much rent do they pay, how is the value paid as rent calculated before going on to suggest that a move to market rental value would provide a simplification to the tax system.

The findings of this survey suggest that very few occupiers in the rural economy pay any rent at all, and that a move to full market rental value could have disproportionate effects on occupiers who have little or no choice over the size of the accommodation provided for them. A move to market rental value as the basis of taxable benefit is likely to lead to upward pressure on pay in order to compensate for the extra cost, and with this consequences for employer costs including increased National Insurance contributions.

 

 

Introducing ‘Blight’ – Planning Blight and Compulsory Purchase

I have made four presentations on the topic of planning blight and compulsory purchase.  These are primarily for the land management students at Harper Adams University, but they may be of interest to a wider audience.  The first video describes statutory blight, and deals with the types of owner and property which qualify for blight protection under the Planning Acts.  The second video deals with the procedures for the successful service of a blight notice up to and including a reference to the Upper Tribunal (Lands Chamber).  Video Three addresses the specific and special requirements for blight notices on farmland and the final video in the series reviews discretionary blight, while also picking up some of the advance purchase and compensation schemes which have been initiated by HS2.

Happy Viewing!

Estates Gazette Rural View: Christmas Reading

I have been writing a quarterly column for the Estates Gazette since 2013 called Rural View.  This year’s articles have covered Water, Forestry, Scotland and farming safety.  If you’d like to catch up with any of the articles over the Christmas holiday, here they are:

Farming Safety: EG Rural View Dec 14 H&S

Scotland: Rural View Sep 2014

Forestry and Woodland Valuation and TaxationEG Rural View May 2014 Forestry

Water: EG Rural View February 14 Water

Meanwhile a happy Christmas and prosperous new year to all my readers and visitors.