UK Floods: Tax Relief Changes Can Help Reduce Risk Of More Misery, Says Tax Body
The Association of Taxation Technicians (ATT) is urging the Government to consider expanding the eligibility criteria for tax relief on contributions to flood defence projects.
At present businesses that contribute to approved flood and coastal defence projects can deduct their contribution from the profits of the business for tax purposes, reducing their Income Tax or Corporation Tax bill. ATT is suggesting the relief be expanded to enable individual taxpayers to make such contributions on a similarly tax-efficient basis. This might be done for example in a similar manner to Gift Aid or Payroll Giving.
The call to expand the scope of the relief comes as Storm Desmond has led to severe flooding in parts of Britain.
Paul Hill, Chairman of ATT’s Technical Steering Group said: “As we can see from Storm Desmond, flooding does not just impact businesses, it can devastate the lives of people living in the areas concerned.
“By extending the scope of flood defence tax relief to contributions from individuals regardless of their particular source of income, more communities could benefit from flood defence projects and do so more quickly.
“That in turn could help the economy as a whole at the same time as reducing the type of misery that is being suffered by people whose homes have been flooded this month.
“At the beginning of the year, the ATT drew attention to the lack of logic in only granting tax relief on a contribution to an approved flood defence project if it was made by a business. We see no reason why less value should be attributed to contributions from private individuals than to those from businesses. On that basis, tax relief should be equally available on all contributions regardless of the source.
“The discussion of what more might be done to avoid repetition of the current widespread flood damage to homes needs to include consideration of the effectiveness and relevance of the tax provisions that were introduced in response to the winter flooding of 2013-2014.
“Anything that can be done to accelerate Environment Agency projects and make the available government funding go further has to be worth considering. The availability of tax relief – however structured – on individual contributors to an approved flood defence project needs to be included as part of that debate.”
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