New Chancellor, new ideas?

Capital allowances and tax incentives could be one of the most powerful levers available to the new Chancellor John Healey as the UK looks to stimulate investment and modernise its commercial property estate.

What changes would you like to see?

Here are three ideas that we think the Treasury could explore:

1. Bring back BPRAs. Business Premises Renovation Allowance was a 100% relief for bringing business premises back into business use that was available between 2007 and 2017. During that time many unused properties were brought back into use, which were only commercially viable because of the enhanced tax relief. Now would be a great time to introduce a similar owners and developers struggle to make the numbers stack up on redevelopment projects.
2. Enhanced capital allowances for retrofitting. Much of the UK’s commercial property estate is 30+ years old and significant investment is required to improve energy and water efficiency.  A targeted relief for plant & machinery that reduces the energy and water consumption of a building could help the operational cost of properties across all sectors. The original Enhanced Capital Allowances relief was overly complex, so we would welcome a simplified measure but with the same focus on energy and water savings with enhanced tax relief.
3. Vacant property exemption. Too many deals stall because of high transaction costs. What if properties and sites that had been unused for more than 2 years could be sold without any SDLT/ LBTT? This could be the incentive needed for a project to be sold to a new owner that could kickstart development

None of these require radical reform but they could directly influence real world investment behaviours.

Let’s see what policies the new Chancellor announces as he looks to stabilise the economy and build business confidence.