Chancellor Phillip Hammond has introduced no new property taxes in his Spring Budget – but a clampdown on those setting up companies to minimise tax burdens may ultimately lead to additional controls on landlords.
There was no explicit reference to the introduction of mortgage interest tax relief changes for landlords, announced in the summer of 2015 and scheduled to begin next month; some landlord groups had campaigned for it to be scrapped.
However, measures announced to minimise the advantages of self-employed over the employed in terms of National Insurance and tax payments suggest that the fine print of the Budget – to be released later today – may have some issues for landlords, including those who set up companies to reduce the impact of the mortgage interest change.
The Residential Landlords Association has already estimated that about a fifth of landlords may be affected by the National Insurance changes.
Prior to today’s Budget it was made known to the media that the Treasury had looked at data surrounding the effect of stamp duty on both residential transaction levels and on revenue achieved by the measure. But Hammond ruled out action today, suggesting he would see if there was a need for further revision of SDLT later in 2017.
Hammond told MPs that the economy continued “to confound the commentators with robust growth, record employment, and a deficit down by two-thirds.”
Borrowing would be £16.4 billion lower than that forecast in the 2016 Autumn Statement, just five months ago – however, government debt remains at around £1.7 trillion, so austerity measures will remain in place.
Other measures introduced include cutting corporation tax to 19 per cent this year and then 17 per cent in 2020; initiatives to cap excessive increases in business rates for some small businesses; the National Living Wages will rise and there will be a higher tax allowance for those earning £45,000 and above.
There will also be more funding for local broadband projects and 5G mobile technology, plus funding for the devolved authorities in Wales, Scotland and Northern Ireland – although this funding adds up to less than £1 billion between them. Hammond also announced additional funding for schools, apprenticeship training and some colleges. There will be an extra £1 billion for social care in 2017/18 – plus more in the future.
This will be the final Spring Budget; Hammond confirmed today that in future there will be just one government ‘fiscal event’ each year in future, in the autumn.