With a significant focus on positioning the economy for a post-COVID world, it is perhaps not surprising that other areas of the economy received greater focus from the Chancellor in his Budget speech.

There were however some positive announcements with £1.8 billion being allocated to a new brownfield fund to regenerate unused land and a cut in the Universal Credit taper which will be well received by the sector and its tenants.

From a wider tax perspective, arguably the most prominent change was the introduction of the new Developer Tax which will help to fund the remediation of cladding issues, although its application to the sector is thankfully less than anticipated.


Residential Property Developer Tax (‘RPDT’)

After some clarification, RPDT should be far less important to the sector than originally expected as, following consultation feedback, build to rent development activities are now out of scope and there is also an exemption for not-for-profit housing providers as well as their wholly owned subsidiaries.

RPDT will introduce a new 4% tax, from 1 April 2022, which will apply to companies (or groups of companies) undertaking UK residential property development with annual profits in excess of £25 million. The tax will be based on the residential property development profits before the deduction of any financing costs.

Notification of Uncertain Tax Treatment by large businesses

There will be a new requirement for large businesses to notify HMRC when they take a tax position in their returns for VAT, corporation tax, or income tax (including PAYE) that is uncertain.

While full details are not yet available, it appears likely that the regime will initially only require groups within scope, to disclose positions which have resulted in a provision made within the accounts for the uncertainty, and the tax treatment applied is not in accordance with HMRC’s known position. A notification would then only be required if the tax advantage exceeds £5 million.


Despite rumours that we may see a reduction in the reduced rate of VAT (currently 5%) for domestic fuel (which would have directly benefitted the sector’s tenants), there were very few VAT announcements in the Autumn Budget and nothing from a VAT perspective that is directly relevant to the sector.

Corporation Tax

Many Housing Associations benefit from the availability of charitable exemptions. Nevertheless, the following corporation tax announcements may still be of interest in the sector, particularly for Housing Associations with non-charitable subsidiaries.

  • Corporation tax rates - There were no further announcements on corporation tax rates.  The increase announced at the Spring Budget 2021 was confirmed and so the UK Corporation Tax rate will increase from 19% to 25%, from 1 April 2023. 
  • Capital allowances - The £1 million Annual Investment Allowance will be extended to 31 March 2023 to continue to encourage business investment and support economic activity and will be due to revert to the £200,000 limit from 1 April 2023.

Employment Tax

With the post-COVID economy being one of the Chancellor’s key areas of focus, the October Budget was surprisingly muted from an employer’s perspective.

The main change for the year ahead is the previously announced 1.25% National Insurance Contribution increase from April 2022, which will fund social care prior to the introduction of the separate Health and Social Care Levy from April 2023.

Other announcements concerned:

  • Pension tax relief for low earners in net pay arrangements – To prevent low earning individuals’ take-home pay being affected by the way their pension scheme operates tax relief, the government will introduce direct top-up payments for affected net pay arrangement scheme members. These will start to be paid from 2025/26 in relation to contributions made in 2024/25 onwards.
  • Public sector pensions – Legislation will be introduced to ensure that the pensions tax framework applies as intended to public sector pension reforms (broadly, that compensation payable is not taxable and individuals are not taxed on any retrospective breaches of pension savings limits as a result of the McCloud case remedy).
  • Income tax – As already announced, the personal allowance and higher rate threshold remain frozen and the additional rate threshold remains at £150,000.
  • Benefits in kind – The van benefit charge and fuel benefit charges for cars and vans will rise in line with CPI from 6 April 2022.
  • National Living Wage – As anticipated, an increase in the National Living Wage / National Minimum Wage rate, such that employees aged 23 years and over will be entitled to £9.50 per hour for pay periods starting from 1 April 2022.
  • High-skilled migration – A new Scale-Up visa will launch in Spring 2022 to help eligible growth businesses recruit key overseas talent who meet certain language requirements and have a salary of at least £33,000.

Stamp Duty Land Tax (‘SDLT’)

There were no specific SDLT announcements that could affect this sector.

If you would like to discuss any of these points, please do not hesitate to contact your usual KPMG contact, or one of the following:


Corporate Tax:         

Simon Robinson          (0782 5682 425)

Kathryn Mallett            (07802 312 242)



Daniel Smith               (07585 401 983)

Gareth Blower              (07977 921 260)


Employment Tax:         

Paul Moreels                (0191 401 3703)


Stamp Duty:                  

Neil Whitworth                 (07979 905 690)