Can the Chancellor get Britain building – Autumn Statement 2023
The Chancellor, perhaps painfully aware that national house building targets will be missed and with a scaled-down HS2 scheme fresh in his mind, used his Autumn Statement to get “Britain building”.
There was however little for residential developers to cheer. Rumours of cuts to stamp duty were just that, the nutrient neutrality rules receiving a glancing nod, and no mention at all of biodiversity net gain regulations that take effect in January next year.
In attempts to speed up the planning regime, the Chancellor promises local authorities the ability to recover the full costs of major planning applications in return for meeting faster decision-making. Where they do not, the full cost of planning applications will be refunded.
Whilst that might help in the delivery of major infrastructure projects there is a very real risk that it will introduce further delay for residential developers. Local authority planners fearful of incurring cost may, and perhaps understandably, be tempted to focus their time where there is financial reward or penalty.
The measures will do very little to help ease the planning pressures facing residential developers and may just make matters worse.
Those renting will no doubt welcome the increase in local housing allowance, and landlords too the ability to convert houses into two flats under permitted development rights. Those proposals will go out for consultation and will undoubtedly come under scrutiny.
Additionally, the use of permitted development rights to allow local authorities, businesses and homeowners to install electric vehicle charging points will also go out for consultation.
With a general election looming there is a very real risk that neither of these proposals will make it onto the statute books should there be a change of government.
Other changes affecting the construction and property sectors
The Chancellor also announced an increase to the Annual Tax on Enveloped Dwellings (ATED), increasing by 6.7% from 1 April 2024 in line with the Consumer Price Index, and that he will maintain the van benefit charge and the car and van fuel benefit charges through to 2025.
The Construction Industry Scheme (CIS) did not escape the Chancellor’s attention, with the promise of legislation to add compliance with VAT obligations to the CIS Gross Payment Status compliance test. The changes will also expand HMRC’s powers to remove Gross Payment Status immediately in cases of serious non-compliance involving VAT, Income Tax Self-Assessment, Corporation Tax Self-Assessment and PAYE. Regulations will be laid to set out exceptions to VAT compliance obligations and to remove the majority of payments made by landlords to tenants from the scope of the scheme. All legislation will come into force from 6 April 2024.
What impact is this going to have on the profitability of your business?
Our Autumn Statement 2023 question time webinar is now available to watch on-demand. During the webinar, our panel of tax and business experts came together to examine the changes unveiled by the Chancellor, and to answer your questions. Click here to watch the webinar.
Alternatively, if you would like any further information or guidance on this topic, get in touch with your usual Kreston Reeves contact or contact us here.
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