In March/April 2021, several significant tax changes will take effect that have far reaching consequences, especially for the property and construction sectors. There have been calls from politicians and business organisations, among others for a delay to some or all of the planned changes.
John Cullinane, Director of Public Policy at CIOT, said:
“We urge that any decision to extend or delay planned tax changes next Spring is clearly announced by the end of next month in order that business and individuals have adequate time to prepare.
“We hope the Government will confirm its plans in good time, well ahead of the expected March Budget, to create a more stable, predictable environment for businesses and people. If we give businesses more certainty now that will be good for our embattled economy, good for business investment, good for much-needed growth and good for government as well.”
Significant tax changes for business and individuals due to be implemented in Spring 2021 include:
- VAT reverse charge on construction services (with effect from 1 March 2021)
- Changes to the Construction Industry Scheme following the consultation on tackling abuse (with effect from 6 April 2021)
- Off-payroll working rules – extension to the private sector (from 6 April 2021)
- Introduction of the additional two per cent rate of SDLT for non-UK resident buyers of residential property in England and Northern Ireland (from 1 April 2021).
- End of temporary increase in the threshold at which SDLT is payable on purchases of residential property in England and Northern Ireland (the SDLT ‘holiday’ last day being 31 March 2021)
John Cullinane continued:
“Businesses undertaking extensive preparations for these tax changes and their impacts, such as on cash flow, must know as early as possible, and no later than January 2021, if the Government intends to delay, or extend in the case of the SDLT ‘holiday’, any of these measures as a consequence of the ongoing COVID-19 pandemic. Early notice of any postponement is essential for industry and for individuals to provide certainty, minimise costs and allow for effective deployment of resources.”
John Cullinane added:
“Devolved governments will need timely notice of any decision to extend the current SDLT holiday to understand the effects of UK changes on block grant adjustments and have time to consider the implications for their tax policies, revenues and broader policies.”