Schedule 19 - Capital allowances: conversion of parts of business premises into flats
Finance Bill
5:45 pm
Mr Richard Ottaway (Croydon South, Conservative)
I should be grateful if the Paymaster General would assist the Committee on a few points. The schedule relates to the conversion of parts of business premises into flats. Obviously, there will be debate about what sort of business premises and what sort of flats. It would help me if the Paymaster General would answer one or two questions.
First, in chapter 3, ``Qualifying buildings and qualifying flats'', the schedule states:
``the building must have more than 4 storeys above the ground floor''.
Obviously, the figure must be fixed somewhere, but why at four storeys, not six or eight? Why does it specify high rise? There is obviously a strategic objective, which is laudable, to try to get more accommodation. Secondly, the building must have been constructed before 1 January 1980. Why do we need such a limit?
On qualifying flats, proposed new section 393D(1)(c) states:
``the flat must be held for the purpose of short-term letting.''
As I understand it, short-term letting means a lease of fewer than five years—[Interruption.] The Paymaster General says seven years. What happens at the end of the seven years? Must the tenants be changed? The Minister has that at her fingertips, I am glad to say, and I look forward to hearing from her. I have only two further points to make, which she may want to take as a job lot at the end.
I now come to the difficult question of high-value flats. In deciding what is a high-value flat, notional rent is based on a furnished flat. We know that there is growing use of unfurnished flats. What happens if flats are unfurnished? Why do we have to distinguish between the two? Why not include unfurnished flats as well?
My penultimate point is that the valuation does not include other payments. Has the Paymaster General dealt with the question of service charges? In some flats, service charges are a high component of their value; in some they are minimal. None the less, that is an important question. Finally, the notional rent limits table is moderately crude. The Paymaster General represents a Bristol constituency where flats have a certain value; equivalent flats in less salubrious parts of Great Britain attract a lower value. I know that the table distinguishes between flats in Greater London and elsewhere. Would not it be more subtle also to include a regional variation?