Recommendation 10

The Government should keep under review the effect of its fiscal policy on the availability of land for natural capital investment. In particular, the effect of the inclusion of environmental improvement schemes within the scope of APR relief from April 2025, combined with the changes to APR thresholds to be introduced in April 2026, ought to be monitored for their effects on the supply of land to environmental improvement projects. Care must be taken to ensure that fiscal policy provides appropriate incentives to deliver genuine ecosystem enhancements, rather than providing opportunities to shelter capital from tax obligations, and that it does not encourage the removal of prime land from food production in a way which compromises the UK’s food security. We recommend that the Government report to the House on the operation of APR relief in relation to environmental improvement schemes no later than three months from the end of the 2026–27 financial year. (Recommendation, Paragraph 64)