Significant tax changes ‚ March/April 2021

15 Dec 2020

In March/April 2021, a number of significant tax changes are due to take effect that have far reaching consequences for the property and construction sectors in particular. There are calls for some or all of these to be delayed: the purpose of this letter is to ask that any decision, one way or another, is clearly announced at an early date so that business and taxpayers have time to prepare.

Far-reaching tax changes for business and individuals are due to be implemented in Spring 2021. These include:

VAT reverse charge on construction services (with effect from 1 March 2021)1 Changes to the Construction Industry Scheme following the consultation on tackling abuse (with effect from 6 April 2021) Off-payroll working rules - extension to the private sector (from 6 April 2021)2 End of temporary increase in the threshold at which SDLT is payable on purchases of residential property in England and Northern Ireland (the SDLT ‚ holiday‚ last day being 31 March 2021) Introduction of the additional 2% rate of SDLT for non-UK resident buyers of residential property in English and Northern Ireland (from 1 April 2021).

Businesses undertaking extensive preparations for these tax changes and consequential impacts, such as on cash flow, need to know as early as possible, and no later than January 2021, 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.

In addition, the 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.

The original commencement date for this measure was specified as 1 October 2019. However, this was amended to 1 October 2020 and subsequently, to March 2021.

Postponed from 6 April 2020.