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Duties

Stamp duty land tax

Reforms were introduced to the charging provisions for non-residential property. The stamp duty land tax (SDLT) charged on purchases of non-residential properties and transactions involving a mixture of residential and non-residential properties is to change for transactions on or after 17 March 2016.

Thereafter SDLT will be charged at each rate on the portion of the purchase price which falls within each rate band. The new rates and thresholds are as follows:

 

Transaction value band  Rate
£0-£150,000  0%
£150,001 - £250,000  2%
£250,001 +  5%

 

For new leasehold transactions, SDLT is already charged at each rate on the portion of the net present value (NPV) of the rent which falls within each band.

On and after 17 March 2016 a new 2% rate for rent paid under a non-residential lease will be introduced where the NPV of the rent is above £5 million.

The new rates bands and thresholds for rent paid under a lease are:

 

Net present value of rent Rate
£0-£150,000  0%
£150,001 - £5,000,000 1%
£5,000,000 + 2%

 

Higher rates of SDLT will be charged on purchases of additional residential properties, such as second homes and buy-to-let properties. The higher rates will be 3 percentage points above the current SDLT rates:

 

Thresholds Existing SDLT rates New additional property SDLT rates
£0 - £125,000 0% 3%
£125,001 - £250,000 2% 5%
£250,001 - £925,000 5% 8%
£925,001 - £1,500,00 10% 13%
Over £1,500,000   12% 15%

The announcement also provides arrangements where there is a period of overlap or a gap in ownership of a main residence.
Companies purchasing residential property will be subject to the higher rates, including the first purchase of a residential property. Properties purchased for under £40,000, caravans, mobile homes and houseboats will be excluded from the higher rates.

Climate change levy

Rates for the climate change levy (CCL) are to increase for 2017/18, 2018/19 and 2019/20.

The CCL main rates will increase in line with RPI.

These increases are partly intended to replace tax revenues lost as a result of the abolition of carbon reduction commitment energy efficiency scheme.

The reduced rates of CCL for qualifying businesses in the climate change agreement scheme will be amended so participants will not pay more CCL than they would under the currently expected RPI increase for that year.

Fuel duty

The main rate of fuel duty for both petrol and diesel are to remain frozen at 57.95 pence per litre.

Vehicle excise duties

Vehicle excise duty rates are to be maintained in real terms by increasing the duty by the RPI. This is a consistently applied policy as rates have increased in line with inflation since 2010. The next increase in rates will apply on 1 April 2016.

Exemption for classic vehicles

A 40 year rolling exemption for classic vehicles was announced in Budget 2014. Budget 2016 now makes this a permanent exemption for classic vehicles so that on 1 April each year vehicles constructed more than 40 years before the 1 January that year will automatically be exempt from paying VED. It is reported that there are around 10,000 classic vehicle owners.

Landfill tax

Rates are set to increase by inflation rounded to the nearest 5 pence.

It is reported that since 2000, the amount of waste sent to landfill has reduced by 70% while the average household recycling rates have risen from 18% to 44%.

Gaming duty

Duty is paid by casinos on their gross gaming yield. Rates range from 15% which applies to the first £2,370,500 of gross gaming yield (GGY) up to 50%.
The 50% rate applies to any GGY that exceeds the aggregate of the bandings to which the 15%, 20%, 30% or 40% apply.
If the bandings were not increased in line with inflation then more GGY would be subject to higher rates.
The increase in gaming duty bans will take effect for gaming duty accounting periods starting on or after 1 April 2016.

Hand-rolling tobacco

The duty rate on hand-rolling tobacco increases with effect from 6pm on 16 March 2016 by 5% above the retail price index (RPI). This represents an additional 3% rise above the tobacco duty escalator.

Air passenger duty

Duty rates are set to increase in line with RPI.

Talk to us to see how any of these changes could affect your finances.