The 2023 Autumn Statement confirmed a number of the rumored personal and business tax changes, but announcements in the Indirect Tax sphere were limited. Our team highlight some of the main property related changes and how these will impact our clients.
Property Related Changes
The Autumn Statement was a relatively sleepy affair, with few high-profile announcements for the property sector.
The introduction of the VAT domestic reverse charge for construction services, together with other changes in the tax landscape have caused increased red tape and uncertainty for the property sector, so a relatively quiet Autumn Statement will suit the sector. Our clients need certainty in order to be able to plan activities and projects in the coming years, so the fewer big-ticket announcements, the better.
In terms of the main announcements, the zero-rate for energy saving materials (ESM) will be extended from February 2024 to include:
o additional technologies such as water-source heat pumps and,
o buildings used solely for a relevant charitable purpose.
These changes will be welcome to private individuals making environmental improvements to their homes as well as charities that have been unable to claim relief under EMS regulations for a number of years. Those looking to install water-source heat pumps may wish to delay installation until the relief applies in February 24, to avail themselves of the VAT savings. Further, charities planning such works should work with contractors to carefully review schedule of works to ensure that reliefs will be applied.
Whilst not strictly VAT, legislation will be introduced that will add compliance with VAT obligations to the Construction Industry Scheme Gross Payment Status compliance test.
And finally, from 1st January 2024, Growth Market Exemption, a relief from Stamp Duty (SD) and Stamp Duty Reserve Tax (SDRT), will be extended to by increasing the threshold for market capitalisation (a condition within the exemption) from £170 million to £450 million.
Please reach out to your VAT consultant or email us at VAT@bbvat.co.uk to discuss the implications of these upcoming changes, further.