Spring Statement 22: Overview for landlords

Zero vat on green energy for homeowners

For the next five years, homeowners will not have to pay VAT on energy efficiency materials such as solar panels, heat pumps or insulation.

This incentive will make it cheaper for landlords to make their properties more energy efficient, ahead of the minimum energy efficiency standard for rental properties, which is set to be increased to C for new tenancies from 2025 and extended to existing tenancies from 2028.

No increase on buy-to-let stamp duty

Property investors in England have been spared a hike in stamp duty, despite speculation that the government would raise the tax on additional homes from three percent to four percent.

Government want feedback from landlords on simplifying tax

Although it wasn't mentioned in the most recent Spring Statement, the government is looking at ways to simplify the tax system for landlords.

The Office for Tax Simplification (OTS) has launched an online survey and a "Call for Evidence" where they want landlords' views on:

• the complex parts of paying tax on property income

• the differences between rules for residential lettings and Furnished Holiday Lets

• how easy it is to report the right amount of income and qualifying expenses

• suggestions for improvements to the current system

The consultation is open now and closes on 5 June 2022.

Spring Statement Key Points:

Taxation

• The income threshold for at which point people start paying National Insurance will rise to £12,570 in July, which the chancellor said was a tax cut for employees worth over £330 a year

• He pledged to cut basic rate of income tax by 1p in the pound before the end of this Parliament

• The Employment Allowance, which gives relief to smaller businesses' National Insurance payments, will increase from £4,000 to £5,000 from April. There is certain eligibility criteria to meet when claiming the Employment Allowance and it cannot be claimed where the director is the only employee.

Fuel, energy and living costs

Millions of households are facing a 54% rise in the cost of a typical annual gas and electricity bill when the regulator's new, higher price cap takes effect on 1 April. The average price of petrol has risen by more than 40p per litre since last year's Spring Statement.

The chancellor said he had already taken "decisive action", in helping people with their bills. This includes a £150 council tax rebate for 80% of households, followed by a £200 discount on bills in October which will need to be repaid, and an expansion to a support scheme for vulnerable people.

• Fuel duty will be cut by 5p per litre until March 2023.

• Homeowners installing energy efficiency materials such as solar panels, heat pumps, or insulation will see VAT cut on these items from 5% to zero for five years

• Local authorities will get another £500m for the Household Support Fund from April, creating a £1bn fund to help vulnerable households with rising living costs

Economy and public finances

• The Office for National Statistics (ONS) said prices rose by 6.2% in the 12 months to February - the fastest for 30 years.

• The UK economy is forecast to grow by 3.8% this year, according to the Office for Budget Responsibility (OBR), a sharp cut from its previous prediction of 6.0%

• The economy is then forecast to grow by 1.8% in 2023, 2.1% in 2024, 1.8% in 2025 and 1.7% in 2026

• The annual inflation rate was 6.2% in February, and is likely to average 7.4% for the rest of this year, but with peak of 8.7% in the final quarter of 2022

• The unemployment rate is now predicted to be lower over the next few years than in the OBR's previous forecast in October