The Chartered Institute of Taxation has called for clarity on next year's planned tax changes.
The Chartered Institute of Taxation (CIOT) has called on the government to confirm by the end of January whether it plans to delay or extend major tax changes planned for Spring 2021 because of the ongoing economic impact of COVID-19.
In March/April 2021 several significant tax changes will take effect that potentially have far reaching consequences, especially for the property and construction sectors. The plea for clarity by the end of January is to help businesses and people plan for 2021 with some confidence.
The changes due to be implemented next Spring include: a VAT reverse charge on construction services; the introduction of the additional 2% rate of stamp duty (SDLT) for non-UK resident buyers of residential property in England and Northern Ireland; and the end of the temporary increase in the threshold at which SDLT is payable on purchases of residential property in England and Northern Ireland.
There have been calls from politicians and business organisations, among others, for a delay to some or all of the planned changes.
John Cullinane, director of public policy at CIOT, said: “We urge that any decision to extend or delay planned tax changes next Spring is clearly announced by the end of next month in order that business and individuals have adequate time to prepare.
“We hope the government will confirm its plans in good time, well ahead of the March Budget, to create a more stable, predictable environment for businesses and people. If we give businesses more certainty now that will be good for our embattled economy, good for business investment, good for much-needed growth and good for government as well.
“Businesses undertaking extensive preparations for these tax changes and their impacts, such as on cash flow, must know as early as possible if the government intends to delay, or extend in the case of the SDLT ‘holiday’, any of these measures as a consequence of the ongoing COVID-19 pandemic. Early notice of any postponement is essential for industry and for individuals to provide certainty, minimise costs and allow for effective deployment of resources.
“Devolved governments will need timely notice of any decision to extend the current SDLT holiday to understand the effects of UK changes on block grant adjustments and have time to consider the implications for their tax policies, revenues and broader policies.”
