We have been analysing today's Economic Update delivered by Chancellor Rishi Sunak - here are our top tax takeaways.
- From 8 July 2020 until 31 March 2021, house buyers in England and Northern Ireland will pay no Stamp Duty Land Tax (SDLT) on the first £500,000 when they move home. In some cases, the SDLT rate for residential property now will be lower than for commercial property. This change does not apply in Scotland and Wales which have different regimes. The 3% surcharge is still payable where applicable.
- The nil rate band for residential leases in England and Northern Ireland is also increased to £500,000 from 8 July 2020 until 31 March 2021.
- VAT applied on tourism and hospitality related activities is cut from 20% to 5% for six months from 15 July 2020. Guidance on the categorisation of supplies that will benefit from the reduced rate will need to be clear, as many businesses will not have accounted for mixed supplies to HMRC in the past.
- In a development of the Coronavirus Job Retention Scheme, UK employers will receive a one-off payment of £1,000 for every furloughed employee who remains continuously employed through to the end of January 2021, and who earns above £520 per month on average between the end of October 2020 and the end of January 2021.
- Each Monday to Wednesday in August, customers can enjoy 50% off meals and non-alcoholic drinks in eligible cafes, pubs and restaurants across the UK up to £10 per person.
- Will the Scottish Government resolve the new "dilemma" on Land and Buildings Transaction Tax (LBTT)? The unexpected and welcome increase to the SDLT nil rate band will need to be replicated in Scotland to bridge the disparity between those moving home in England and Northern Ireland versus in Scotland. In response to COVID-19, the Scottish Government recently extended the Additional Dwelling Supplement (ADS) replacement of previous main residence deadline from 18 months to 36 months from the effective date.
- Young job seekers across the UK will benefit from the Kickstart Scheme, aimed at building experience for those at risk of long-term unemployment. Government funding will cover wages for 25 hours a week, and associated National Insurance and pension contributions.
Contributors
Isobel d'Inverno
Director of Corporate Tax
Karen Davidson
Partner
Bob Langridge
Partner
Alan Barr
Partner