The Autumn statement from the Chancellor of the Exchequer was high on electioneering, but from a commercial property perspective was low on content.
Reform of residential Stamp Duty to take a progressive form is not to be applied to commercial property – probably because the Chancellor cannot afford that change.
As expected there was some further assistance for SMEs on business rates, and the pledge to investigate reform of this unfair tax that effectively punishes businesses for expanding. In this case, local government probably cannot afford any substantial change.
The lack of more action on business rates will be a disappointment for UK firms and commercial property. It is scandalous that through such a tentative time for the UK economy empty rates has been levied.
However, there will be indirect benefits for commercial property from the Chancellor’s measures to boost the economy, like road building, more NHS spending, tax support for R&D, and plans to build a “Northern Powerhouse”.
In short, the autumn statement was about drawing election battle lines – Labour with the mansion tax, versus the Conservatives with stamp duty reform. However, if the run-up to the general election begins now, one has to wonder how bored the electorate will have become by May of next year!
Key points:
• 2% cap on RPI indexation of business rates multiplier extended another year.
• Doubling of small business rates relief to be extended for another year to March 2016.
• Business rates transitional arrangements on properties with a rateable value of £50,000 or less, where a large bill rise is coming, extended to March 2017.
• Business rates in Wales devolved to the Welsh Government.
• Government to conduct another review of the future of the business rates system, which is to be reported in the 2016 budget.
• Personal tax allowance increased to £10,600. Higher rate income tax threshold rises to £42,385.
• New Stamp Duty bands system from midnight – 0% to £125,000, 2% on the portion £125k to £250k, 5% up to £925k, 10% up to £1.5m, 12% on anything higher.
• Fuel duty stays frozen.
• New trains for Northern Rail and Trans-pennine Express franchises to be included in the tender process.
• New scientific research institute for Manchester, with branches in Leeds, Sheffield and Liverpool.