Expert Update | Finance: Kreston Reeves on following the Autumn Budget

Expert Update | Finance: Kreston Reeves on following the Autumn Budget

Kreston Reeves
Jo White is a Tax Consultant at accountants and business advisers Kreston Reeves. She can be reached by email:

The Chancellor stood up at 3.30pm on 29 October to announce the contents of the Autumn Budget. A lot was discussed about the property market and how the Government can put in place steps to help increase availability of housing to all.

The Chancellor announced £675m of co-funding to create a Future High Streets Fund to support councils in drawing up formal plans for the transformation of their high streets. This will include the facilities for redevelopment of under-used retail and commercial areas into residential, creating new opportunities for housebuilders.

A further £500m for the Housing Infrastructure Fund has also been announced to unlock 650,000 homes. Furthermore, up to £1 billion of British Business Bank guarantees will be made available to support the revival of SME housebuilders. All potentially good news for smaller residential developers.

Conversion simplification
The Chancellor also acknowledged that there needs to be a simplification of the process for converting commercial property into new homes. They are therefore consulting on this process and will report back in due course. He also highlighted that he wishes to give parishes and neighbourhoods greater influence on homes for sale to local people at prices they can afford. This could empower up to 500 neighbourhoods to allocate or give permission on land for housing and to at a discount to local people in perpetuity.

Tax reliefs for businesses were also announced. For those investing in equipment, from 1st January 2019 the Annual Investment Allowance is set to increase from £200,000 to £1 million for two years. This accelerates tax relief on the investment in qualifying plant and machinery for a significant number of businesses. If you are looking to invest in capital items over the next few months’ then it may be worth delaying the purchase of any items to maximise the immediate tax relief available. The timing of expenditure is important as those without a December year end will be subject to the transitional rules.

If your business has invested in items which qualify as integral features (such as lifts, lighting, heating systems) or have incurred expenditure on high emission cars then the rate in which you can claim tax relief is reducing from 8% per annum to 6%. This change will come into effect from 1st April 2019 for corporate businesses.

If you are looking to, or have purchased or constructed a non-residential structure from 30th October 2018, then it will be possible to claim Structures and Buildings Allowance on the cost of the structure that does not qualify under the capital allowances regime. This straight-line tax relief is 2% of the cost of the building per annum.

The announcements have shown some potential opportunities for SME housebuilders, following to the proposed increase in funding and relaxation of the planning rules. For your business itself there could be some opportunity to claim further tax reliefs on capital expenditure which will help reduce the businesses taxable profits going forwards.

Related posts