Rishi’s Budget announcement – SDLT & housing impacts

Chancellor Rishi Sunak announced this month that SDLT thresholds will not return to their pre-covid levels until after October. The stamp duty holiday will be extended from March 31st up until June 30th, with it then being reduced from £500,000 down to £250,000 from July 1st until September 30th. This will help to soften the blow of returning to pre-covid levels at a time the industry really needs it! 

What’s more, it was also announced that the government will guarantee up to 95% mortgage loans from March 2021 on the purchase of properties valued up to £600,000. This is exciting for first time buyers and could really help get the market moving in a positive way. 

What does Rishi’s Budget announcement mean for me? 

If your property purchase is not eligible for the government’s SDLT holiday, don’t worry! There are a number of other ways you may be able to reduce your SDLT liability. 

Every year, thousands of people across the country overpay their stamp duty on commercial land, commercial properties and residential purchases, simply due to misclassification of their property. Even if you have already paid, you may be able to receive a stamp duty refund for overpaid stamp duty. 

The amount you can save is dependent upon the property type and tax paid to HMRC, but in some cases, it is possible to achieve up to 80% reduction in costs.

How can Innovation 4 Business help? 

If you’re unsure as to whether you are eligible for savings in stamp duty land tax, get in touch with our expert team. 

We can support with pre-completion advice on upcoming property transactions and post-completion refunds by reviewing historical property transactions to ensure correct SDLT payments are made. 

What does Rishi mean by “investment-led recovery”? 

Innovation is vital to the UKs strategy for post-pandemic economic growth. It enables UK firms to stay creative, increase competitiveness and enables the creation of transformative technologies. The UK is a global leader in science, innovation and technology, and the government is keen to keep it that way. 

The government continues to invest in these fields to help companies conduct innovative ways of working and develop new systems, processes or service. They do so through Research and Development relief. 

In our previous blog, ‘R&D Claim Statistics 2020: What Trends Are Emerging?’, we identified how more companies are benefiting from the R&D scheme annually. This is great news for the country as every £1 spent on R&D projects helps to generate £3 into the economy. This is a key example of an investment-led economy as the government providing relief for the companies investing in economic growth! 

How can Innovation 4 Business help? 

Even if your business has not been financially impacted by the coronavirus, the R&D tax credit scheme can help fund innovative activities so that your company can grow, invest, and recruit. At present only 40% of eligible companies are claiming this relief! 

The UK economy benefits from increased productivity and innovation, and based on Rishi’s comments, the government are likely to continue in support of the scheme for the foreseeable future. Whatever size or sector, if your company is taking a risk by attempting to resolve scientific or technological uncertainties, then you may be carrying out qualifying activity. This includes creating or modifying products, processes or services.

Capital Allowances 

Following the budget announcement, two new First Year Allowances have been introduced to companies who incur expenditure between 1st April 2021 and 31 March 2023 on new plant and machinery, which includes the usual fixtures in buildings and fitting out works that qualify for Plant and Machinery Allowances.

The allowances themselves are quite significant in that for any main pool assets (items such as carpets, furniture, data and IT, fire alarms and security installation), an allowance equal to 130% of the expenditure incurred will be given in year one. This is a large increase when compared to the 18% currently given. Overall, this potentially provides qualifying taxpayers with an immediate 25% saving on their expenditure.

For all other M&E installations and any lifts, there will be a new 50% first year allowance as opposed to the 6% otherwise currently available. This therefore provides qualifying taxpayers with a 9.5% year one saving on the cost of any such expenditure, with the remaining 50% of the expenditure being available to claim in subsequent years.

On a fitting out or refurbishment project where the structure already exists and so it is essentially just qualifying plant and machinery being installed, we would not find it unusual to expect these new allowances will produce a saving of anywhere between 10% and 20% of the total project cost in year one alone.

What do the new capital allowances mean for me? 

The enhancement of these reliefs could have significant benefits for anyone who has done or is about to take on significant refurbishment works on their premises. This could include hotels, hospitality venues, care homes or any venue where significant fit out work has been undertaken. 

How can Innovation 4 Business help? 

If you think you may be eligible or are unsure and want to learn more, we can review your position and guide you through making a claim. 

Our Group of Companies 

Whether you’re a property investor, landlord or just interested in purchasing a residential property, we can help. Our experienced team have a range of experience supporting with SDLT overpayments, R&D relief and property incorporation. 

Not only this, but as part of the ARMCo group of companies, we are able to deliver fully integrated and agile solutions at every stage of the client process. 

Alongside Innovation 4 Business, the ARMCo group includes Chordis Capital, Finance 4 Business, Atlas Land & Planning, Walker Doble, Cape Insurance, Liquidity Club and Midshore Partners. We are smarter together. 

See how we can help you by calling our expert team on 0121 309 0222 or emailing enquiries@innovation4business.com.