The government is writing to anyone who owns or operates an anaerobic digestion plant to determine whether they should pay higher business rates.
This is a property tax levied on all non-domestic real estate and it currently contributes some £25bn to the public purse.
The tax, levied by the government’s Valuation Office Agency (VOA), has recently made some changes to the complex formula they use to calculate business rates.
Their letter to anaerobic digestion plant owners includes up to 20 detailed questions, with the answers being fed into new business rate calculations.
These are likely to lead to higher business rate tax demands.
In response, a group of 75 farmers and other operators has sought legal advice and is preparing to challenge the VOA over its new formula.
The group will initially make a formal challenge to the VOA. If the latter contest the challenge, the group will look to refer the matter to the third party tribunal for a decision on an appropriate level of tax.
This is a process that could end at the Upper Tribunal (Land Tribunal) – an expert tribunal set up to resolve high level disputes about the value of land and buildings.
Chris Handel, managing director of Handel Rating Consultants, s organising the formal challenge.
“Government has changed the way they work out business rates and they’re gathering the information they need to trigger higher payments from anaerobic digestion plant owners.
"This tax rise feels counterintuitive at a time when we need to all green the economy," Mr Handel explained.
He urged anyone receiving one of these letters to consider joining the group challenging the government.
“The UK’s 579 anaerobic digestion plants are nearly all on farms and that puts famers right in the firing line. Do they need higher tax bills?
"The government promised “a better, fairer farming system” only six months ago. This latest move may leave a nasty taste in the mouth," he added.