Experts from leading South West law firm Stephens Scown have reacted to Chancellor Philip Hammond’s first Autumn Statement, commenting on the announcements regarding tax, affordable homes and letting agents fees.
Tax issues
Private wealth partner at Stephens Scown, Malcolm Emery commented: “In time honoured tradition the Chancellor is maintaining the fight against tax planners and is intending to introduce further tax avoidance measures which, it is hoped, will raise an additional £2bn.
“The Chancellor would also like the UK to be the ‘no. 1’ destination for business and he has confirmed that the rate of corporation tax will fall to 17% by 2020 as previously announced. Salary sacrifice schemes have also come under the spotlight and are being scrapped from 2017. These schemes enable employees to receive benefits rather than cash and pay less tax and national insurance contributions.”
However, there was good news for rural businesses. Malcolm Emery explains: “At last some good news for the rural community to cheer; rural rate relief is being increased to 100% and will be worth £2,900 per annum. This is available if your business is in a rural area with a population below 3,000.”
Malcolm added: “With the impact of Brexit likely to hit consumers’ pockets soon, it is a shame that the Chancellor did not take this opportunity to reduce the standard rate of VAT; perhaps this is his big surprise for next year’s Autumn budget?
“Overall, it was a relatively quiet Autumn Statement although they do say that the devil is in the detail. We will know more when the Finance Bill is published on 5 December 2016.”
£1.4bn aimed at delivering 40,000 new affordable homes in England
Stephens Scown acts for some of the biggest social housing providers in the South West. Keith Wright, partner and head of social housing at the firm said: “It is very welcome that the Chancellor has seen fit to put more resources into this area of housing, particularly in the South West. A considerable strain has been put on financial resources following the withdrawal of much of the grant funding that was previously available. We will be discussing the impact of the announcement with our registered provider clients working in the region.”
Banning upfront fees imposed by lettings agents in England
Ben Jones, an associate in Stephens Scown’s dispute resolution team said: “This change will squeeze residential letting agents and they will almost certainly look to replace this income by increasing the fees payable by landlords. The obvious outcome, which has already happened in Scotland, is that the costs will be shifted onto landlords. In turn, landlords will look to increase rent levels to cover their outlay.
“If agency fees do increase, this could lead to an increase in the number of private landlords managing properties themselves. Many of these landlords may not be familiar with statutory requirements relating to the protection of deposits, the requirement to provide prescribe information to tenants and the minimum energy efficiency standards (which are due to come into force in 2018). Failing to comply with these requirements could lead to litigation and result in significant financial penalties for landlords.”
Stephens Scown has over 290 staff, including more than 50 partners, across its offices in Exeter, Truro and St Austell. For more information visit www.stephens-scown.co.uk