Officials advise firms how to avoid planning gain levy

Government officials are privately urging developers and councils to act quickly if they want to escape paying the planning gain supplement (PGS), Building has learned.

Henry Cleary, the growth area director at the Communities Department (DCLG), has told authorities and landowners that the only way of avoiding the levy is to ensure that schemes are approved before it is introduced.

It will probably take four years for the PGS to come into force. The governments plans for it are still in a state of flux. Gordon Brown, the chancellor of the exchequer, is due to set out the Treasury’s plans in next week’s pre-Budget report. A coalition of business groups has warned him that it would not benefit the government financially, and would hurt smaller developers.

Roger Humber, secretary of the Milton Keynes Forward developers lobby group, said: “They are saying to councils, grant planning permissions if you are worried about the PGS.”

DCLG officials have also indicated that sums paid under “roof tax” arrangements will be offset when PGS liabilities are being calculated. But they have said that there cannot be a blanket exemption from the PGS.

Martin Bacon, chief executive of the Ashford’s Future delivery agency, said: “The government has given assurances that if it introduces the PGS, then the tariff will be taken into account.”

But Alan Cherry, chairman of Countryside Properties, said he was not reassured by the signals from the DCLG that it would do this. He said: “The threat of PGS has been giving landowners second thoughts about selling land, and developers second thoughts about buying land.”