Commercial Property Comes Under the Chancellor’s Spotlight

Written by Paul Windsor on 17 March 2016

After a considerable amount of back-pedalling from the Chancellor after last week’s budget, there are some announcements that have remained in place which we think are worthy of note for our hard working business clients:

Corporation Tax: The rate of Corporation Tax which is the lowest in the G20, will be cut to 19% next year and cut further to 17% in 2020.

Stamp Duty Land Tax: From 17 March 2016 new SDLT rates will apply to the value of commercial property over each tax band. The new rates and tax bands will be 0% for the portion of the transaction value up to £150,000; 2% between £150,001 and £250,000, and 5% above £250,000.

Interest Payment Restriction: Relief on interest payments will be capped at 30% of UK earnings, with exceptions for groups with legitimately high interest payments, for companies with profits in excess of £5m.

Business Rates:  From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates. Currently, this 100% relief is available if you’re a business that occupies a property (e.g. a shop or office) with a value of £6,000 or less. There will be a tapered rate of relief on properties worth up to £15,000.

NI on Ex-gratia payments: From April 2018 employers will now need to pay National Insurance contributions on pay-offs (for example, termination payments) above £30,000 where Income Tax is also due. For people who lose their job, payments up to £30,000 will remain tax-free and they will not need to pay National Insurance on any of the payment.

For full budget notes following our budget breakfast last week, please click here. If you have any questions regarding these changes please contact one of our business advisors on 020 8545 7600.