Reading: Property investors hit by hat-trick of measures in Autumn Statement, says BDO
Property investors have been hit by a hat-trick of measures in this year’s Autumn Statement, according to accountancy and business advisory firm, BDO LLP.
A 3% increase in stamp duty on second homes and investment properties from April 2016, an acceleration of capital gains tax payments on residential properties to 30 days after sale and a housing benefit cap potentially hitting rents will make property investment a less-attractive option.
Despite the chancellor’s ambition to rebalance the UK economy there were no measures aimed at boosting the UK’s mid-sized businesses – a segment of the economy that creates one in four private sector jobs, delivers £1 trillion in revenue and is geographically spread across the country.
David Brookes, head of tax at BDO’s Reading office, said: “This was the third ‘fiscal event’ of 2015 following on the heels of the Summer Budget and we are only a few months away from Budget 2016. Accordingly, as predicted, the focus was on the spending review and economic forecasts rather than dramatic fiscal changes which can be left to the Budget.
“The chancellor described this as a big spending review from a government that does big things but it has largely bypassed medium-sized businesses, the backbone of the UK economy creating one in four jobs and over £1t in revenue.
“As well as the continued focus on tax evasion and avoidance, the biggest losers in the Autumn Statement were property investors, including foreign investors, who will be hit by a hat-trick of measures.
“The chancellor’s commitment to delivering the £12 billion welfare saving in full was a surprise that meant there was no hole in his spending cuts to be filled with additional taxes. The chancellor said that based on the OBR’s growth forecasts, the increase in tax receipts along with reduced government borrowing costs should keep his plans to eliminate the deficit on track. However, it will be interesting to see how robust these forecasts prove to be as the tax receipts in recent months have been weaker than expected.
“Large employers with employment costs broadly over £3 million will be subject to the apprenticeship levy announced in the last Budget and the rate was announced as 0.5% of employment costs.
“The chancellor also announced 26 new Enterprise Zones in order to help balance the UK economy geographically which is a welcome change to support areas of the UK that are struggling to grow”.
