Stamp duty land tax (SDLT) relief in Freeports: first guidance published
Budget 2021 included the announcement that several new Freeport sites would be designated, with a number of tax reliefs available to businesses operating within them. For a business looking to move into a Freeport site, the welcome news is that there will be relief from SDLT. HMRC has now published some initial guidance - what do businesses need to know?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
One feature of a Freeport site is a relaxation of customs rules, allowing goods to move into and out of the site like a form of hub. However, there are other reliefs - including from SDLT. HMRC has now published guidance on this relief. In order to qualify, a business must buy land or buildings in a designated site that will be used in a qualifying way. The SDLT relief also applies to leased land or buildings. To be using the land or buildings on a qualifying way, it must be used:
- in a commercial trade or profession;
- for development or redevelopment for resale (but not as residential property);
- for letting to another person who pays rent, and who does not use the building as residential property.
Where at least 90% of the purchase prices for qualifying land or buildings, relief from SDLT is available in full. If less than 90% of the purchase prices for qualifying land or buildings, relief is available on the portion of the price that relates to the qualifying part, as long as this is at least 10% of the total price. The claim must be made on a land transaction return within 14 days of the transaction, and all claims must be made by 14 October 2027 at the latest. HMRC's guidance contains further information, including several helpful examples.
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