Katten Muchin Rosenman comments about the Autumn Budget
Charlotte Sallabank, partner at Katten Muchin Rosenman LLP, comments about some of the details from today’s Autumn Budget (27 October).
On no new green taxes:
“Some green reliefs rather than new taxes, although a new ‘ultra long-haul’ rate band of air passenger duty has been introduced for flights to destinations where the destination country’s capital is more than 5,500 miles from London, w.e.f. 1 April 2023.
“Whilst business rates payers will be disappointed with the reliefs announced there is to be a consultation on an online sales tax (discussed in the Treasury Business Rates Review Call for Evidence in July 2020 which might help redress the balance between high street and online retailers – but the introduction is likely to be some way off as the initial consultation document has not been published yet.”
On the Residential Property Developer Tax:
“The government announced in February 2021 that it would introduce a new tax, residential property developer tax (RPDT), to help bring an end to unsafe cladding, provide reassurance to homeowners and support confidence in the housing market.
“The draft legislation was published in September 2021 but the rate was not announced. The Chancellor announced today that the rate of RPDT will be 4%. There will be an annual allowance of £25 million and RPDT will be included in a company’s usual corporation tax returns.”
On Capital Gains Tax:
“The Chancellor announced that there will be an increase in the payment window for capital gains tax purposes in relation to UK property disposals. The current payment window is 30 days, this will be extended to 60 days. In the Office of Tax Simplification (OTS) Report of May 2021, the OTS suggested that there should be an increase in the payment window in relation to non-resident capital gains tax returns.
“The budget today showed that this payment window increase will apply to both resident and non-resident capital gains.”
On good news for banks:
“The bank surcharge, as anticipated, will reduce w.e.f. 1 April 2023 from 8% to 3%, with an increase in the group allowance from £25 million to £100 million – this is timed to coincide with the increase in corporation tax rate to 25% so banks will only be hit with a 28% rate.”
On Investment Allowance:
“The £1 million Annual Investment Allowance will not end in December 2021 as planned – it will be extended all the way to March 2023 to encourage investments in the UK. In addition, the Chancellor announced new investment to encourage investments in technologies like solar panels. Any consequent increase in value in a property from that or from other property improvements will not be reflected in business rates for 12 months.
“The Chancellor announced that there will be a 50% business rate discount for businesses in the retail, hospitality, and leisure sectors lasting for 12 months. Pubs, music venues, cinemas, restaurants, hotels, theatres, gyms, and eligible businesses can claim a discount on their bills of 50%, up to a maximum of £110,000. The planned increase in the multiplier will be cancelled.
“Alongside the Small Business Rates Relief, the Chancellor claims more than 90% of all retail, hospitality and leisure businesses will see a discount of at least 50%.
“He also announced that properties will be revalued every three years from 2023 for rating purposes – so bringing the rateable value more in line with real time valuations.”
Kindly shared by Katten Muchin Rosenman LLP
Main photo courtesy of Pixabay
