Chancellor Philip Hammond’s Budget today has provided relief for those looking to climb on to the UK property ladder after abolishing stamp duty for first time buyers of property under £300,000. At the same time HM Treasury has announced further legislation to clampdown on tax evasion and avoidance.
Mr Hammond told MPs that "house prices are increasingly out of reach for many" with a drop in ownership for those under 34 despite housebuilding at highest level since the crash and the Help to Buy scheme.
In response the Chancellor abolished stamp duty for first-time buyers purchasing properties worth up to £300,000 (in London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by first-time buyers will be exempt from stamp duty) meaning 80 percent of all first-time buyers will not pay stamp duty. At the same time Mr Hammond pledged £44 billion of capital funding and loans to build 300,000 houses per year through to the mid 2020s.
The Chancellor also said the Government will address the issue of empty properties - with local authorities given the green light to levy a 100 percent council tax premium for long term empty houses and flats.
Although not included in detail in the Chancellor’s speech, the Budget also contained 18 measures and additional investment in HMRC to tackle avoidance, evasion, and non-compliance. Together these are forecast to raise an additional £4.8 billion between now and 2022-23.
The new measures include an increase in the time limits for HMRC to assess offshore tax non-compliance to at least 12 years in all cases, with a consultation on this in spring 2018.
The Government also announced that it will publish a consultation response on the proposed requirement for designers of certain offshore structures, that it said could be misused to evade taxes, to notify HMRC of these structures and the clients using them. This work will be taken forward in conjunction with the OECD and EU.
With effect from April 2019, withholding tax obligations will be extended to royalty payments, and payments for certain other rights, made to some low or no tax jurisdictions in connection with sales to UK customers. The rules will apply regardless of where the payer is located.
From 22 November 2017 a restriction will be introduced to the relief for foreign tax incurred by an overseas branch of a company, where the company has already received relief overseas for the losses of the branch against profits other than those of the branch. This ensures the company does not get tax relief twice for the same loss. The Double Taxation Relief targeted anti-avoidance rule will also be amended to remove the requirement for HMRC to issue a counteraction notice, and extend the scope to ensure it is effective.
The Government has also extended HMRC’s powers to hold online marketplaces jointly and severally liable (JSL) for the unpaid VAT of all traders on their platforms.
Other measures and figures announced by the Chancellor included:
- Tax-free personal allowance to rise to £11,850 in April 2018
- Higher-rate tax threshold increases to £46,350
- From April national living wage will raise by 4.4 percent to £7.83
- 600,000 further people due to be in work by 2022
- Doubling of Enterprise Investment Schemes (EIS) limits for knowledge intensive companies
- Short-haul air passenger duty rates and long-haul economy rates to be frozen, paid for by a tax hike for premium economy and private jets passengers
- Growth forecast for 2017 downgraded from two to 1.5 percent
- GDP downgraded to 1.4 percent for 2018-19 and 1.3 percent, 1.5 percent and 1.6 percent in the years to 2021-22
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