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New Welsh taxes come into force

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Mark Drakeford: Landfill tax to benefit affected communities

ON APRIL 1 2018, the first Welsh taxes for almost 800 years ‘went live’.

The new Land Transaction Tax (LTT) and Landfill Disposals Tax (LDT) will replace UK Stamp Duty Land Tax (SDLT) and Landfill Tax (LfT) respectively.

These taxes will be collected and managed by the Welsh Revenue Authority (WRA).

LAND TRANSACTION TAX

The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 will legislate for LTT in Wales. The Cabinet Secretary for Finance, Mark Drakeford, announced the new LTT rates and bands alongside the draft budget in October 2017. However, in response to the UK Autumn Budget in November 2017, he revised the rates and bands for residential properties in December 2017.

LTT will be based on a marginal rate system like SDLT, which means the purchase price is taxed at a specific rate which applies to that band. For example, table 1 below shows that a £190,000 residential property would be exempt from the first £180,000 with LTT charged on the remaining £10,000 at 3.5%.

RESIDENTIAL PROPERTIES

The proposed LTT rates and bands for residential properties are different to those that are currently in place in Wales under SDLT. As shown, residential properties up to £180,000 are exempt from LTT in Wales whilst it is currently properties up to £125,000 for SDLT.

The Cabinet Secretary for Finance commented that “this new threshold, which is £55,000 higher than the starting threshold for SDLT will reduce the tax burden for around 24,000 homebuyers in Wales.” Additional rate for residential properties.

In November 2015, the UK Government announced the higher rates of SDLT would apply from 1 April 2016 to purchases of additional residential properties, such as second homes and buy-to-let properties.

In response to this, the Welsh Government decided to impose an additional rate for LTT of 3% on all price thresholds.

NON-RESIDENTIAL PROPERTIES

There are also differences in rates and bands between LTT and SDLT for non-residential properties. LTT in Wales will include an additional rate for properties over £1 million. Individuals will pay less LTT for properties between £150,000 and £250,000 when compared to SDLT but more for properties over £1 million.

The price threshold for incurring a 2% LTT rate for non-residential lease rents is £3 million lower than SDLT. The Welsh Government explained this is due to generally lower lease rates in Wales meaning very few transactions would pay the top rate of LTT if it was consistent with SDLT.

LANDFILL DISPOSALS TAX

The Landfill Disposals (Wales) Act 2017 legislates for LDT, which will replace UK LfT in Wales from 1 April 2018. It will be a tax on the disposal of waste to landfill payable by landfill site operators. LDT will consist of a lower and standard rate like LfT but will also include a new unauthorised disposals rate.

In the Welsh Government 2018-19 budget, the Cabinet Secretary for Finance confirmed that the lower and standard rates of tax will remain consistent with LfT for 2 years with the unauthorised disposals rate set at 150% of the standard rate.

Professor Drakeford said: “The Landfill Disposals Tax Communities Scheme recognises there can be a negative impact for communities through the disposal of waste.

“Funding from the scheme will directly benefit the environment for those who live near a landfill site helping to offset the impact of waste to landfill.

“Grants of £5,000 to £50,000 will be available to projects in 2 bidding rounds every year and one project will receive funding of up to £250,000 a year.”

WELSH REVENUE AUTHORITY

The Welsh Revenue Authority (WRA) has been established to manage and collect devolved taxes in Wales. The WRA was established in October 2017 and is the first non-ministerial department to be set up by the Welsh Government. The authority will operate independently from Welsh Government and be accountable to the Assembly.

Business

Cresswell Quay potato farm allowed to keep holiday let

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A CALL to allow a 600-acre Pembrokeshire potato farm to keep a holiday let erected “in innocence” without permission, which is said to be essential for supporting the business, has been approved.

In an application recommended for approval at the January 13 meeting of Pembrokeshire County council’s planning committee, Mr and Mrs I and F Elliot sought permission for the continued use of a mobile unit with a veranda as tourist accommodation at Cresswell Barn Farm, Cresswell Quay.

Cresswell Barn Farm supplies potatoes to Welsh supermarkets and the site has a certified campsite.

The application was before the committee rather than being delegated for an officer decision as it was recommended for approval, subject to the completion of a Section 106 legal agreement essentially keeping it for holiday use only, despite being in conflict with the development plan and was made by a close family member of an officer in the planning service.

An officer report accompanying the application said an enforcement investigation was started way back in 2012 following a claim a caravan was located at the site and was being used for residential purposes.

That was closed in 2023; a 2022 investigation taking place after an allegation a structure on-site was being used for holiday letting.

A 2023 certificate of lawfulness application was made to regularise the breach of planning, saying the unit had been used for residential purposes for more than a decade, but insufficient information was provided to allow it, the report said.

Fiona Elliot sought permission for the continued use of a mobile unit with a veranda as tourist accommodation at Cresswell Barn Farm, Cresswell Quay

An appeal against this was later made to Planning and Environment Decisions Wales (PEDW) but was withdrawn by the applicant.

It said the enforcement action was ongoing, leading to the formal planning application.

Of the site itself, the report said: “The agent has confirmed that due to many variables, there is no typical year for the enterprise in terms of profitability and that the income generated from tourist related activities at the farm, is critical to the farming enterprise.  The high-quality holiday unit therefore provides an additional income stream for the farming enterprise.”

It added: “The holiday unit is located adjacent to buildings that make up the farm complex, with the accommodation offering guests an immersive rural experience that introduces them to aspects of the rural economy.

“Information submitted in support of this application confirms that the income from the holiday uses at the site is critical to supplementing the potato farming enterprise.”

Speaking at the meeting, Fiona Elliot said the holiday let was a small-scale part of the wider farm complex; the building having been on-site for some 15 years, the applicants more recently “in innocence” using it as a holiday let, which visitors have described as “five-star,” not realising they needed planning permission.

Following a call by Cllr Brian Hall to back the officer recommendation of conditional approval, members unanimously supported that.

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Business

Small business confidence remains low as costs rise and jobs are put on hold

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Survey shows SMEs still cautious on hiring and investment, despite a modest lift in new orders

UK SMALL firms are still feeling gloomy about the economy, with confidence stuck near historic lows as weak growth and rising costs continue to bite, according to a quarterly survey by ACCA and the Institute of Management Accountants.

The UK edition of the Global Economic Conditions Survey (GECS) found confidence among small and medium-sized businesses dipped slightly in the final quarter of 2025, after a sharper fall in the previous quarter. The findings suggest many SMEs are still struggling to shake off the depressed mood that set in at the end of 2024.

Measures tracking investment and staffing also point to caution. Only a small number of respondents said their businesses – or their clients – had increased spending on capital projects over the past three months, while a higher-than-normal proportion reported cutting back.

On employment, the survey recorded a notable share of businesses reducing headcount or pausing recruitment, with relatively few saying they were hiring or restarting recruitment.

There was, however, a small sign of improvement in future demand. The survey’s forward-looking New Orders Index rose in Q4. While still weak by long-term standards, it was reported to be well above the low point seen during the COVID-19 pandemic – suggesting the underlying picture may not be as bleak as other indicators imply, and that some firms may be positioning themselves for better trading conditions.

Lloyd Powell, head of ACCA Cymru/Wales, said confidence remains “fragile,” arguing that businesses have seen little recovery since a sharp drop following the 2024 Budget. He added that the decline after the 2025 Budget was smaller, but said the impact on SMEs and the wider economy remained significant.

Powell said the modest improvement in new orders could indicate some firms are starting to consider investment again as they spot opportunities emerging.

Cost pressures, meanwhile, remain a major concern. More than four in five respondents reported higher operating costs during Q4, and early warning signs of corporate stress – including late payment issues and worries about customers or suppliers going out of business – stayed high compared with historic levels.

Jonathan Ashworth, ACCA’s chief economist, said the Q4 indicators continue to paint a “very downbeat” picture for UK SMEs, with confidence still struggling to recover from the lows seen at the end of 2024. He warned that 2026 is likely to remain difficult, citing sluggish UK growth and global uncertainty.

The survey notes that further interest rate cuts could ease some pressure on businesses, though ongoing domestic cost inflation suggests the Bank of England may have to approach any reductions carefully.

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Business

Milford Haven Chinese restaurant redevelopment plans on hold

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PLANS to convert a vandalised former Pembrokeshire town centre Chinese restaurant to a flat and bedsits which were expected to be approved have been put on hold after concerns about the impact on a neighbouring property.

In an application recommended for approval, the January 13 meeting of Pembrokeshire County Council’s planning committee, Mr S Sahin and Miss S Ahmed, through agent Hayston Developments & Planning Ltd, seek permission for a change of use of Grade-II-listed 20 Hamilton Terrace, Milford Haven from the former Mandarin Restaurant to one flat and eight bedsits, an amendment of an original scheme which included one extra bedsit.

The scheme, in the town’s conservation area, was before committee rather than delegated to officers as it was recommended for approval despite being contrary to a policy of the development plan.

The application for the Mandarin follows a withdrawn scheme for three flats deemed invalid by council planners.

A supporting statement said: “The property has historically been in use as a Chinese restaurant on the ground floor with two flats on the upper floors of the building. The ground floor use of the building ceased some 10 years ago and currently lies vacant. Due to the lack of use of the building, it is in a very poor condition and has been the subject of unfortunate vandalism particularly to the interior of the building.”

It says that, after the previous scheme was withdrawn, the applicants have “since reviewed their position and now present revised applications to be considered by the council”.

It went on to say: “The clients have re-thought on what type of accommodation is needed and required in this part of Milford Haven,” adding: “The proposal is considered to put an important Grade-II-Listed Building back into beneficial use and would help to secure its long-term future. The proposal would represent a high-quality and sympathetic conversion and extension of the building, and which would make a positive contribution to the locality and conservation area status.”

An officer report recommending approval said one letter of objection was received raising concerns including potential impact on a neighbouring property and boundaries, and the discharge of the sewer under number 20.

At the meeting, member of the public Jessica Clarke raised concerns about the potential impact on her mother’s neighbouring property, with issues of height and massing, surface water discharge, and shared boundary walls, asking for a site visit before any decision was made.

Cllr Brian Hall, who moved a site visit, was one of several members who raised their concerns about potential impacts, members unanimously backing that move.

The application will return to a future planning meeting.

Earlier this week utilities companies were cutting off services to the building following a warrant from a magistrate.

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