The majority of UK based property and construction businesses believe that the current tax system is unfavourable to the industry with stamp duty to the biggest barrier to growth, new research has found.
They also believe that Government policies are not positive for the industry going forward and many also think that the decision to leave the European Union and Brexit will have a negative effect.
The survey conducted by national audit, tax and advisor firm Crowe Clark Whitehill shows that 77% believe this year’s general election was unfavourable to the property and construction market and the Government needs to restore confidence and reassure the industry before the UK formally leaves the EU in March 2019.
It also found that more than 70% of participants believe that the current UK tax system is unfavourable to the industry, with 55% viewing stamp duty as the biggest barrier to business growth and another 17% perceiving a 45% income tax rate as the biggest deterrent to investment.
The survey report suggests that support for the property and construction market and local authorities must be high on the Government’s priorities over the upcoming year. Indeed, three quarters of respondents highlighted that the current green belt protections were not conducive to solving the housing crisis.
‘Some of the uncertainty that currently pervades the industry revolves around what deal the UK government eventually agrees with Brussels. For those in the construction industry, there remain real concerns over the potential barriers to free movement and this has the potential to increase labour costs and reduce the scope of operations due to the potential lack of skilled labour,’ said Stacy Eden, head of property and construction at Crowe.
He pointed out that the recent increases in stamp duty have resulted, as widely predicted, in a considerable slowdown in the market. ‘While recent stats show that stamp duty receipts have risen, this should not cloud the reality of what is going on in the market,’ he said.
‘The negative stamp duty levy remains a substantial burden and a drag on sector growth. Reducing this burden should be the government’s first step to encouraging much needed investment and liquidity in the market,’ he explained.
‘Building on greenbelt land is possibly the only chance councils have for hitting a target of up to 300,000 new homes a year that is arguably needed to solve the housing crisis,’ he added.