Tax

The UK Chancellor announced a number of measures today (8 July 2020) to boost the economy in the wake of the coronavirus lockdown.  These included two tax cuts to VAT and stamp duty in an attempt to get the hospitality and housing sectors “bustling again”.

VAT will be cut from 20% to 5% for the hospitality and tourism sectors from 15 July 2020 until 12 January 2021. In particular, the reduced VAT rate should apply to supplies of: (i) food from restaurants, cafes and pubs; (ii) accommodation in hotels, B&Bs, campsites and caravan sites; and (iii) attractions, such as cinemas, theme parks and zoos.

The Chancellor also announced an emergency stamp duty holiday to help revive the UK property market. Starting today, there will be a temporary increase in the nil rate band for residential stamp duty land tax, with the result that no stamp duty will be payable on the first £500,000 of all standard property sales in England and Northern Ireland. For those purchasing second homes, additional stamp duty land tax will remain payable but the 3% band will now apply in respect of the first £500,000 of consideration, rather than the first £125,000. This stamp duty holiday will last until 31 March 2021. Separate regimes apply in Scotland and Wales with no changes having yet been announced.

If you would like to discuss the above and any impacts it may have on your business further, please contact one of the authors below, a member of Weil’s Tax team or your usual Weil contact.