Duties – Budget Report 16 March 2016
With effect from 21 March 2016 the following duty rates will be frozen in cash terms this year:
- duty rates on beer
- duty rates on spirits and other drinks above 22% alcohol by volume (abv)
- duty rates on still cider and lower strength sparkling cider.
The duty rates on wine and made-wine at or below 22% abv, and high strength sparkling cider above 5.5% abv will rise by RPI inflation from 21 March 2016.
With effect from 6pm on 16 March 2016, the hand-rolling tobacco duty rate is increased by 5% above RPI inflation this year. This is an additional 3% rise above the tobacco duty escalator which, as announced at Budget 2014, will continue until the end of this Parliament.
The main rate of fuel duty for petrol and diesel will remain frozen at 57.95p per litre in 2016/17.
Stamp duty land tax (SDLT) for non-residential property
Changes take effect on and after 17 March 2016 for purchasers of non-residential property with an upfront payment worth more than £150,000 or a lease net present value (NPV) of more than £5m. These measures do not apply in Scotland.
The measure changes the rules for calculating the SDLT charged on purchases of non-residential properties and transactions involving a mixture of residential and non-residential properties. At present, for purchases of freehold, the assignment of an existing lease and for the upfront payment (premium) on a new leasehold transaction, SDLT is charged at a single percentage of the price paid for the property, depending on the rate band within which the purchase price falls.
On and after 17 March 2016, SDLT will be charged at each rate on the portion of the purchase price which falls within each rate band. The new rates and thresholds for freehold purchases and lease premiums are:
|Transaction Value Band||Rate|
|£0 – £150,000||0%|
|£150,001 – £250,000||2%|
For new leasehold transactions, SDLT is already charged at each rate on the portion of the NPV of the rent which falls within each band. On and after 17 March 2016 a new 2% rate for rent paid under a non-residential lease will be introduced where the NPV of the rent is above £5m. The new rates bands and thresholds for rent paid under a lease are:
|NPV of rent||Rate|
|£0 – £150,000||0%|
|£150,001 – £500,000||1%|
SDLT: higher rates on purchases of additional residential properties
From 1 April 2016 changes will apply to individuals purchasing a residential property in England, Wales and Northern Ireland who, at the end of the day of the transaction, own two or more residential properties and are not replacing a main residence. Companies and other non-natural persons purchasing residential property will also be subject to the higher rates, including the first purchase of a residential property in England, Wales and Northern Ireland. The higher rates will be three percentage points above the current SDLT rates, as follows:
|Threshold||Existing SDLT rates||New additional property SDLT rates|
|£0 – £125,000||0%||3%|
|£125,000 – £250,000||2%||5%|
|£250,000 – £925,000||5%||8%|
|£925,000 – £1,500,000||10%||13%|
A similar levy will apply to the Land and Buildings Transaction Tax in Scotland.