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  • Writer's pictureClive Cass

Business rates reduction

Welcome to our monthly newsletter for property landlords. We hope you find this informative and please contact us to discuss any matters further. In the Autumn Budget, Chancellor Sunak announced a temporary cut in business rates for the businesses most affected by the pandemic. This includes hotels, pubs, restaurants, music venues and gyms. In the 2022-2023 tax year, these businesses will be able to claim a 50% discount on their business rates bill, up to the maximum of £110,000. The rate is expected to return to normal in the 2023-2024 tax year. This reduction is in addition to the existing Small Business Rates Relief, meaning that your business could receive a discount higher than 50%. If your business is not already getting business rates relief, it would be beneficial to check with HMRC or your local council to determine if your business is eligible. The business rates deduction is part of a larger tax reform to make the system simpler and fairer for all. From April 2023, all businesses will be able to make property improvements without paying extra business rates for 12 months. Capital Gains Tax reporting deadline extended


Also announced in the Autumn Budget was the extension for UK residents to report and pay Capital Gains Tax (CGT) on the sale of residential property in the UK. The deadline has been extended from 30 days to 60 days after completion of the sale. These changes were implemented immediately, so any sales completed after 27 October 2021 can refer to the 60-day deadline. The extension only applies to residential property. If you’re a UK resident and your property is also used for commercial purposes, the 60-day payment window will only apply to the residential percentage of the profits. The extension also applies to non-UK residents that sell any type of property in the UK. Residential Property Developer Tax (RPDT) The Government has introduced a new residential property developer tax (RPDT) to take effect from April 2022.

The tax is 4% of the profits incurred from residential property development. It will only apply to the largest residential property developers, with annual profits exceeding £25 million from development activities. This tax only applies to registered companies and the 4% tax will only apply to the profits in excess of the £25 million allowance. The measure was introduced as part of the government’s plan to eliminate dangerous cladding from residential properties. Residential property development (RPD) activities include designing, constructing, adapting, marketing, managing or seeking planning permission for a residential property. According to the draft legislation, buildings that are already in the process of being constructed or adapted will be within the scope of the tax. The calculation of the profits charged to the tax is based on current rules for Corporation Tax. This means that you will report your RPD profits on your Company Tax Return and pay the amount owed in the same way as you normally pay your Corporation Tax bill. It is essentially an extension of Corporation Tax. Please give us a call if you have any questions about how to calculate the RPDT or how it will affect your business.


Average property price hits quarter of a million The UK House Price Index (UK HPI) was released for October with the average house price breaking a new record at £250,311. Annual house prices increased by 9.9% with an average monthly increase of 0.7%. This means that despite the Covid-19 crisis, the price of a standard home in the UK has surpassed a quarter of a million pounds. This is an increase of over £30,000 since the pandemic began in early 2020! The housing demand shows no signs of slowing down, particularly in areas like Wales, Northern Ireland and the northwest of England that have the highest annual growth rates. One of the key factors of this growth was that more and more people were moving further from urban centres and needing more space for a home office. Combined with the expiry of the stamp duty holiday and other temporary government measures, this has helped push the average house price to an all-time high. Please get in touch if you would like to discuss purchasing or selling a property.

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