HM Treasury has published the Finance Bill 2021-22, setting out the full details for two new taxes.
Here’s what you need to know.
Residential Property Developer Tax
The Residential Property Developer Tax (RPDT) is a tax on profits that companies derive from UK residential property development. The levy is charged at four per cent on all profits exceeding the annual allowance – set at £25 million.
The cash raised will be used to address unsafe cladding following the Grenfell Tower tragedy.
The tax will be introduced from April 2022. Full explanatory notes can be found here.
Economic Crime (Anti-Money Laundering) Levy
The Economic Crime (Anti-Money Laundering) Levy will affect any firm currently under the scope of the Money Laundering Regulations (MLR) – such as accountants, financial advisers, financial institutions, estate agents, and law firms who hold client money.
The amount charged will depend on the firm’s turnover. For example, businesses with a turnover of between £10.2 million and £36 million will pay between £5,000 and £15,000, while those with a turnover of £36 million and £1 billion will pay between £30,000 and £50,000.
Those with a turnover of less than £10.2 million, however, will be exempt from the levy.
The tax will come into effect from 2022. The full explanatory notes can be found here.
Other notable changes
Alongside new taxes, the Finance Bill 2021-22 will also:
- Extend tax relief for museums, galleries, theatres, and orchestras from 27 October 2021 to 31 March 2024, increasing the relief organisations can claim as they invest in new productions and exhibitions
- Reform the UK’s Tonnage Tax regime to bring more shipping firms to the UK
- Simplify the basis period rules for self-employed and small businesses
- Increase the National Minimum Pension Age from 55 to 57 from 06 April 2028
- Increase the National Living Wage (NLW) and National Minimum Wage from April 2022
“Stronger economy for the British people”
Commenting on the Finance Bill, Financial Secretary to the Treasury Lucy Frazer said: “This year’s Finance Bill will help us to continue on our mission to deliver a stronger economy for the British people – through stronger growth, jobs and public finances.”
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