Reasons to choose Wilson Browne
The Spring Statement 2022, delivered by the Chancellor of the Exchequer, Rishi Sunak, contained little impacting the property sector directly.
However, there were some energy efficiency and business rates announcements to note and further detail in the full text of the statement on options being considered for reform to capital allowances.
The Chancellor announced a reduction in VAT on energy saving materials such as solar panels, heating pumps and roof insulation from 5% to zero for five years. The changes will take effect from April 2022.
To support the decarbonisation of non-domestic buildings, the Chancellor also confirmed the introduction of targeted business rates exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible low-carbon heat networks with their own rates bill. These measures will now take effect from April 2022, a year earlier than previously planned.
The Chancellor also referenced the previously announced 50% temporary business rates relief for eligible retail, hospitality and leisure properties, also coming in this April and the statement confirms the previously announced freezing of the business rates multiplier on 2022–23.
The Spring 2022 statement confirms that ahead of the ending of the ‘super deduction’—the temporary enhanced first year capital allowances that will end in April 2023—the government is ‘considering reforms to best support future business investment’. Once the super-deduction has ended, the UK’s capital allowances regime will include the Structures and Buildings Allowance.
The government is considering measures relating to capital expenditure on general plant and machinery, but confirms that it could also consider changes to other allowances, such as the Structures and Buildings Allowance, or new reliefs targeted at specific investments (such as the current Enhanced Capital Allowances within designated Freeport areas).
The government is considering options ahead of the Budget later this year and, as part of this, will ‘continue to review the latest evidence, including the impact of the super-deduction and views of businesses’.