Autumn Budget 2021 - Construction and Property Highlights

Towers in the City of London at sunset


The Chancellor’s theme for this Budget was to build a stronger economy for the British people.

This was a fairly quiet Budget for construction and property. However, our Construction & Property Tax team have summarised the key issues for this sector.

Annual Investment Allowance

In a welcome move, the current Annual Investment Allowance limit of £1m has been extended until 31st March 2023, rather than it reducing to £200,000 on 1st January 2022 as originally planned.

Capital Allowances – Super Deductions

There were no further changes made to the new Super Deductions and Special Rate Allowance. These incentives provide 130% and 50% first year relief respectively on qualifying expenditure up until 31st March 2023. This measure benefits all those incurring expenditure on property including investors, landlords and occupiers.

Residential Property Developer Tax

This will introduce a new 4% tax which will apply to the largest residential property developers on the profits they make on UK residential property development in excess of £25m per annum. The income generated will help fund the replacement of unsafe cladding. The tax will apply from 1st April 2022 to profits arising in accounting periods ending on or after that date.

Aggregates Levy

The Government will freeze the Aggregates Levy rate for 2022-23 at £2/tonne but intends to return to index-linking in the future.

Landfill Tax Rates

As announced at Spring Budget 2021 both the standard and lower rates of Landfill Tax will increase from 1st April 2022 in line with the Retail Prices Index (RPI). The new rates will be:

Standard Rate : £98.60/tonne

Lower Rate : £3.15/tonne

Business Rates

The Chancellor announced a number of business rate reduction measures. A key change will mean that from 2023, no business will face higher business rates bills for 12 months after making qualifying improvements to a property they occupy. Decarbonisation exemptions will also be available for onsite renewable energy generation, storage and eligible heat networks.

This Budget summary has been prepared from the Chancellor's Budget speech and supporting documentation. Budget proposals are subject to amendments during the course of the Finance Bill through Parliament. We have made every effort to ensure the accuracy of this publication but you should always obtain professional guidance before acting or refraining from any action as a result of its contents.

If you have any questions about this information, please contact Jared Carver, Chris Ranson or Neil Swarbrigg