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COVID-19 – Stamp Duty & VAT changes

In his recent Summer Statement, Rishi Sunak announced changes to the nil rate of Stamp Duty Land Tax and VAT for certain industries to attempt to support those business sectors affected by the COVID-19 pandemic. Here we will summarise the changes announced.

Stamp duty changes (residential property)

Changes to the nil rate band of Stamp Duty Land Tax (SDLT) have been announced by the chancellor which will apply in England and Northern Ireland. This was followed by announcements from the Scottish and Welsh regional assemblies who set the rates in Scotland and Wales.

Here is a brief summary of the regional changes aimed at stimulating the UK property market. In all cases rates will revert to previous levels at 31 March 2021.

England and Northern Ireland – From 8 July 2020, if you purchase a residential property you will only pay SDLT on the amount you pay above £500,000. This applies whether or not you have purchased a property before – it is not restricted to first time buyers.

Scotland – From 15 July 2020, if you purchase a residential property in Scotland you will only pay the Land and Building Transaction Tax on the amount you pay above £250,000.

Wales – From 27 July 2020, if you purchase a residential property in Wales you will only pay the Land Transaction Tax on the amount you pay above £250,000.

In all regions, it is presumed that buyers of second homes and buy-to-let residential properties will still pay the additional stamp duty charge.

VAT changes

In an attempt to address the financial difficulties of businesses in the hospitality and tourism industries, Rishi Sunak also announced a range of VAT reductions on selected supplies for these sectors. Summary of the changes are set out below:


When you supply food and non-alcoholic beverages for consumption on your premises, between 15 July 2020 and 12 January 2021 you will only need to charge 5% VAT. You will also be able to charge the reduced 5% rate of VAT on your supplies of hot takeaway food and hot takeaway non-alcoholic drinks.

Hotel and holiday accommodation

You will also benefit from the temporary reduced rate if you:

  • supply sleeping accommodation in a hotel or similar establishment
  • make certain supplies of holiday accommodation
  • charge fees for caravan pitches and associated facilities
  • charge fees for tent pitches or camping facilities

Admission to certain attractions

If you charge a fee for admission to certain attractions where the supplies are currently standard rated, you will only need to charge the 5% reduced rate of VAT between 15 July 2020 and 12 January 2021. However, if the fee you charge for admission is currently exempt, that will take precedence and your supplies will not qualify for the reduced rate.

DNG are here to help

In most cases these changes should be fairly easy to accommodate in your accounts’ software. Depending on the software  you use you may need to download an update to accommodate the changes. If you are experiencing difficulties we can help.

During these unusual and challenging times for individuals, businesses and other organisations we are here to help. Please speak to your usual contact at DNG or get in touch by clicking here 

Ian Lowry



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