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Cut tax, hope for spend: The Chancellor’s plan to get us buying again.
8 Jul 2020 |
1 minute read
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In the latest of Rishi Sunak's initiatives to shore up the economy in the face of Covid-19, he has today announced two major temporary tax-saving measures:
The first of these is a swingeing change to residential Stamp Duty Land Tax (SDLT), designed to remove 9 out of 10 property purchases from the charge to SDLT until March 2021.
This has been put into effect by raising the threshold under which no SDLT is paid to £500,000. For those who already own property and are buying another, the 3% surcharge will continue to apply as usual subject to the new thresholds.
These changes apply to England and Northern Ireland only – the Scottish and Welsh Governments have not announced that they will be following suit.
The second major change is a UK-wide temporary drop in VAT rates from 20% to 5% for certain industries hardest hit by lockdown, including:
The reduced rate will apply from 15 July 2020 (next Wednesday) until 12 January 2021.
For restaurants, pubs, cafes and other "eligible food service establishments", there is also a separate "Eat Out to Help Out" scheme which will give customers a 50% per person discount (up to a maximum £10) if they dine in Monday to Wednesday. Whilst not, strictly speaking, a tax break this will undoubtedly provide some additional relief for hospitality establishments.
Those businesses will have to apply to an online system to become participants and will have to pay the discounts themselves, before claiming back the amount online, which will be paid "within five working days".
For more information on these schemes or other issues related to retail and consumer law, get in touch or read more about our corporate solicitors or corporate tax legal services.
