Figures recently published by HMRC have revealed a 3% increase in the number of first-time buyer relief (FTBR) claims from the previous quarter, with 78% of transactions paying no Stamp Duty Land Tax (SDLT) at all.
FTBR eliminates stamp duty for first-time buyers paying £300,000 or less for a residential property. Since the introduction of FTBR in the 2017 Autumn Budget, there have been a total of 241,300 FTBR claims, providing an estimated total relief amount of £570 million.
First-time buyers paying between £300,000 and £500,000 pay SDLT at 5% on the amount of the purchase price in excess of £300,000. Those purchasing property for more than £500,000 are not entitled to any relief and pay SDLT at the normal rates.
The Association of Accounting Technicians (AAT) recently suggested that FTBR will cost UK taxpayers £670 million by 2021/2022.
It has called for SDLT liability to be transferred from the buyer to the seller. The AAT argues that this would help people to move up the property ladder, and would assist those in the ‘most populated and expensive parts of the country’, such as London and the South East, where house prices are significantly high.
Phil Hall, Head of Public Affairs and Public Policy at the AAT, said: ‘Switching stamp duty liability from the buyer to the seller isn’t a silver bullet for our myriad housing problems, but it would make the system fairer because those moving up the ladder would be paying duty on the lower-priced house that they are selling, not the higher-price one they are buying.’
Research carried out by online business finance supermarket Funding Options has suggested that UK small and medium-sized enterprises (SMEs) have to wait an average of 43 days to be paid by government contractors.
Funding Options found that top government contractors took more than six weeks to pay their suppliers in 2017.
It warned that late payments can help to push small firms into insolvency. According to Funding Options, late payments have played a significant role in generating construction sector insolvencies: in the year to September 2018, 2,924 construction firms were declared insolvent – a rise when compared to the previous year’s figure of 2,645.
In 2015, the government vowed to pay 80% of its invoices in five days, and the rest within 30 days. However, the research has suggested that government contractors are failing to meet this target.
Commenting on the issue, Phil Hall, Head of Public Affairs and Public Policy at the Association of Accounting Technicians (AAT), said: ‘Government action to tackle this problem, from the voluntary payment code to compulsory but feeble reporting requirements – as well as the creation of a Small Business Commissioner with no real power – have all predictably failed to stem the scourge of late payments.’
In a new report, the Association of Accounting Technicians (AAT) has outlined a range of proposals designed to help raise funds for the NHS without instigating tax rises.
The publication of the report comes following the Prime Minister’s recent pledge to raise £20 billion per year for the NHS by 2023/24. In response to this, the Office for Budget Responsibility (OBR) warned that tax rises will be required in order to fund NHS budget increases.
According to the AAT, its proposals would ‘raise over £27 billion’ while protecting UK taxpayers from increased government borrowing or tax rises.
Within the report, the AAT has urged the government to simplify inheritance tax (IHT); abolish the Marriage Allowance; remove higher rate tax relief for pension contributions; and switch stamp duty liability from the buyer to the seller.
The AAT acknowledged that some of its recommendations would ‘raise significant political challenges’, but stated that the proposals ‘make financial sense’.
Commenting on the matter, Phil Hall, Head of Public Affairs and Public Policy at the AAT, said: ‘AAT’s recommendations will not clear the deficit or enable investment to be showered across the country, but they do identify over £27 billion of annual savings and deserve serious consideration as a worthwhile, credible and thought-provoking contribution to the UK taxation and investment debate.’
The report can be read in full here.
The Association of Accounting Technicians (AAT) has stated that inheritance tax (IHT) is ‘unnecessarily complicated’ and ‘widely misunderstood’.
Responding to a review of the tax by the Office of Tax Simplification (OTS), the AAT said that several IHT exemptions ‘could be scrapped’.
It argues that certain exemptions, such as gifts on marriage and gifts to political parties, are reliefs that the general public are ‘largely unaware of’, and should therefore be abolished.
However, the AAT did state that the current nil-rate band should ‘stay the same’. Previously, some experts had called for the nil-rate band to rise from its current level of £325,000, but the AAT argues that ‘there are no sound economic reasons’ to increase it.
Commenting on the matter, Phil Hall, Head of Public Affairs and Public Policy at the AAT, said: ‘The simplest means of removing complexity around IHT would be to scrap it and rely solely on capital gains tax (CGT) as they have done in Australia since the 1970s.
‘This would be far simpler, and some might argue, a more meritocratic approach to taxation.’
The AAT’s comments on IHT come following the recent publication of a report by think tank the Resolution Foundation, in which it suggests that IHT should be abolished, and be replaced with a new ‘Lifetime Receipts Tax’.
As your accountants, we can carry out a professional review of your IHT planning needs. Please contact usfor more information.