ICAEW Tax Faculty provides analysis of the announcements relating to tax in the Spring Budget 2017.
Many people were hoping for a reduction in the rates of stamp duty land tax (SDLT) charges claiming that punitive rates were causing the property market to stagnate. The only mention of SDLT in the budget was a delay in the reduction in the time period for file and pay until 2018/19 as a result of feedback on the consultation Stamp duty land tax: changes to the filing and payment process.
Currently 30 days is allowed to file and pay SDLT for a property transaction and the plan is to reduce this window to 14 days. The exact date of implementation for the reduction in the time frame was never confirmed but it was planned to be between 1 January 2018 and 1 March 2018 so the time extension could be quite short!
The driver to reduce the time limit was to encourage more on line filing and bank transfers and reduce the number of paper filings and cheque payments. Paper filings represent just 3% of filings and cheques represent about 30% of payments.
The standard rate increase of IPT to 12% from 1 June 2017 will be protected by the introduction of anti-forestalling provisions.
The two thresholds for the soft drinks industry levy, at 5g and 8g of sugar per 100ml, have been designed so that, by taking reasonable steps to reduce sugar content, UK producers and importers of soft drinks can pay less or escape the charge altogether. The rates will be 18 pence per litre (ppl) for the main rate and 24ppl for the higher rate. The levy will take effect from April 2018.
The definition of a taxable disposal for landfill tax is to be amended. The changes clarify the tax treatment of material disposed of at landfill sites and give greater certainty to landfill site operators. Following technical consultation, the draft legislation has been restructured to simplify and improve ease of comprehension. The measure will come into effect after Royal Assent of Finance Bill 2017 and the changes will apply to disposals to landfill in England, Wales and Northern Ireland.
A consultation document will be published on 20 March 2017 on extending the scope of landfill tax to material disposed at illegal waste sites. Landfill tax is currently only chargeable on waste disposed of at permitted sites in England, Wales, and Northern Ireland. As such, the aim of this measure is to tackle the evasion of landfill tax resulting from the disposal of material at illegal waste sites, and deter environmentally damaging behaviour.
The value of the Landfill Communities Fund (LCF) for 2017/18 will remain unchanged at £39.3m and the cap on contributions by landfill operators will be increased from 4.2% to 5.3%. This cap will be maintained subject to consideration of landfill tax receipts, continued progress in reducing the level of unspent funds held by environmental bodies and the proportion of LCF funds spent on administration costs. A statutory instrument will be laid on 10 March 2017. The changes will take effect from 1 April 2017.
The aggregates levy rate for 2017 to 2018 will be frozen at £2 per tonne. This continues the freeze that has been in place since 2009.
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