Budget 2020 - Other Taxes
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The most important measure is the introduction of the temporary Business rates relief to help a range of businesses deal with the impact of Coronavirus. Other measures includes changes to SDLT for non-resident companies and relief for some housing associations.
Jon Hickman - Corporate Tax Partner
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Business rates relief
To help businesses cope with the commercial impact of Coronavirus, business rates reliefs for businesses in England have been confirmed and extended. As a result, some businesses will have a reduced business rates liability or no liability at all, for the year to 31 March 2021.
It had previously been announced that there would be an increase in rates relief to 50% for the year to 31 March 2021 for those retailers in England with a rateable value below £51,000. This was expected to apply to up to 90% of independent shops, pubs and restaurants.
The relief has now been increased to 100% and the scope of the relief has been expanded to include cinemas, music venues and leisure and hospitality businesses. This means that qualifying businesses will have no liability to business rates for the year to 31 March 2021.
Pubs in England with a rateable value below £100,000 will receive a rates discount of £5,000, (increased from £1,000), for the year to 31 March 2021.
Local newspapers in England will also continue to benefit from a business rates discount of £1,500 for their office space until 31 March 2025, and there will be a new 100% relief for all public lavatories in England from April 2020.
The Government will be undertaking a fundamental review of business rates, and a call for evidence will be published in the Spring, with the outcome of the review expected in Autumn 2020.
Non-UK resident Stamp Duty Land Tax (SDLT) surcharge
A 2% SDLT surcharge will be introduced on non-UK residents purchasing residential property in England or Northern Ireland from 1 April 2021. This would bring the maximum SDLT rate up to 17% on such a purchase. Transitional rules may apply, subject to conditions, where contracts exchanged before 11 March 2020 are completed or substantially performed after 1 April 2021.
Stamp Duty on shares
The Finance Act 2019 introduced anti-avoidance rules blocking the use of contrived arrangements on the transfer of listed shares to a connected company by deeming the transfer to take place at market value for stamp duty purposes.
As announced in July 2019, this will be extended to unlisted shares, but the legislation will be amended to prevent a double charge to stamp duty on certain corporate reconstructions such as qualifying partition demergers. You can find out more about the July 2019 announcement here.
Housing Co-operatives - ATED and SDLT
A relief has been announced for qualifying housing co-operatives from Annual Tax on Enveloped Dwellings (ATED) and the 15% flat rate of SDLT on the purchase of a dwelling over £500,000.
The UK-wide ATED relief will apply from 1 April 2021, with a refund available for 2020/21. The SDLT relief will apply in England and Northern Ireland with effect from Autumn Budget 2020. The Government will consult on draft legislation in summer 2020 and legislate in Finance Bill 2021.
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