VAT, Duties and Stamp Duty Land Tax - David Allen Accountants
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VAT, Duties and Stamp Duty Land Tax

VAT rates

From 1 April 2016 the VAT registration threshold will increase from £82,000 to £83,000 and the VAT de-registration threshold will increase from £80,000 to £81,000.

Insurance Premium Tax

Insurance Premium Tax (IPT) will be increased from 9.5% to 10% with effect from 1 October 2016.  The extra revenue generated from this rate increase will be used to fund more flood defences, with Carlisle and Cumbria receiving a share of this once the Environment Agency has concluded a review of our needs.

Gaming Duty bands

The government will increase Gaming Duty bands in line with RPI for accounting periods starting on or after 1 April 2016.

Soft drinks industry levy

It was announced that the government will introduce a new soft drinks industry levy to be paid by the producers and importers of soft drinks that contain added sugar with effect from April 2018.  The levy will apply to drinks with total sugar content above 5 grams per 100 milliliters, with a higher rate being charged for more than 8 grams per 100 milliliters.

There will however be exclusion for small operators, and the government will consult on the details over the summer.

Alcohol duty rates

The duty rates on beer, spirits and most ciders will be frozen this year.

The duty rates on most wines and higher strength sparkling cider will increase by RPI from 21 March 2016, so a couple of days left to stock up!

Tobacco duty rates

Duty rates on all tobacco products will increase by 2% above RPI inflation as planned.  Duty on hand-rolling tobacco will also increase by an additional 3% above this rate to 5% above RPI.  These changes will come into effect from 6pm on 16 March 2016.

Fuel duty

The main rate of fuel duty for petrol and diesel will remain frozen at 57.95 pence per litre in 2016/2017.  This will save a typical motorist £75 per year.  By the end of 2016/2017 fuel duty will have been frozen for 6 years.

Stamp Duty Land Tax (SDLT)

The 2015 Autumn Statement saw the announcement of higher rates of SDLT that will be charged on purchases of additional residential properties (above £40,000), such as buy to let properties or second homes.  This will come in to effect from 1 April 2016.

An extra 3% in stamp duty will be payable on top of the current stamp duty rates but this will not apply to purchases of caravans, mobile homes or houseboats.

The government has also confirmed that purchasers will have 36 months, instead of 18 months, to claim a refund of any SDLT paid if they buy a second residence before disposing of their previous main residence.

The additional tax collected from people buying their second home or rental properties will be used to help those struggling to buy their first home.

New stamp duty rates for commercial property from 17 March 2016

The way in which stamp duty is calculated on commercial property and leasehold premium transactions is set to change with immediate effect.  Currently the rates apply to the whole transaction but from 17 March 2016 the rates will apply to the value of the property over each tax band.

This will work as follows:

  • a transaction up-to £150,000 – 0%
  • between £150,001 and £250,000 – 2%
  • above £250,000 – 5%

This will cut the tax for many businesses purchasing property.

Stamp duty rates for leasehold rent transactions will also change, with a new 2% stamp duty rate on leases with a net present value over £5 million.

For more details on what was announced in the March 2016 Budget in relation to VAT and other duties, please contact Julie Osborn on 01228 711888.