Tax

The tax environment in which housing associations operate is constantly evolving. We're working with our tax advisors RSM to help shape government policy on taxation as it affects the sector and to keep housing associations informed of key issues.

Our tax advisors

RSM is a leading provider of audit, tax and consulting services, with around 3,800 partners and staff in the UK. With more than 200 clients in the social housing sector, from some of the smallest to some of the very largest, they understand very well the challenges that housing associations face.

RSM’s social housing tax services team consists of specialists in VAT, employment taxes, corporation tax, Stamp Duty Land Tax and the Construction Industry Scheme. They have years of experience helping housing associations manage risk, drive efficiencies and realise value across the full range of taxes.

The key members of the RSM team who are working with the NHF are:

Andrew Robinson
Partner, Corporate Tax
andrew.robinson@rsmuk.com
07931 882889

Audrey Fearing
Partner, VAT
audrey.fearing@rsmuk.com
020 3201 8777

David Williams-Richardson
Partner, Employment Taxes
david.williams-richardson@rsmuk.com
01293 843112

John Foskett
Corporate Tax and Stamp Duty Land Tax
john.foskett@rsmuk.com
07436 268379

Ian Brown
Associate Director, VAT
ian.brown@rsmuk.com
07483 965159

Susan Ball
Partner, Employment Taxes
susan.ball@rsmuk.com
07825 430213

Corporation tax changes impacting housing associations and their subsidiaries

Changes being introduced by the Finance (No. 2) Bill 2023 will reduce the options available to housing associations and their subsidiary companies for mitigating their exposure to corporation tax. 

Update on VAT reliefs for decarbonisation and energy saving materials

RSM provide an update on VAT on energy saving materials and our joint response to HMRC's call for evidence on energy saving materials relief.

Holiday pay – what does the future hold?

Holiday entitlement and pay have become particularly complex for employers over recent years. Whilst the government has stepped back from its commitment to enforcing holiday pay under a single enforcement body, it has recently released two separate consultations on the issue.

VAT: replacement cladding and fire remediation works

HMRC has recently withdrawn statutory clearances provided to several contractors in relation to the zero rating of remediation works. This will impact projects where a specific clearance has not been obtained and the works have been completed in the last four years.

Update on option to tax

HMRC has made changes to the option to tax notification process which may have an impact on organisations undertaking non-residential property transactions.

VAT and the installation of energy savings materials

RSM provide an update on VAT reliefs for the installation of energy-saving materials, and set out some recommendations to help housing associations utilise these reliefs.

Update on the latest government consultation on the Building Safety Levy

The NHF submitted a response to the latest consultation on the Building Safety Levy, and has made the case for measures to ensure that the levy will not have an adverse impact on the supply of affordable homes.

Changes to the scope of Annual Tax on Enveloped Dwellings

A rebasing of thresholds in relation to the Annual Tax on Enveloped Dwellings could bring more housing associations within its scope with effect from 1 April 2023.

Further considerations for housing associations on the Building Safety Levy

RSM look at what the latest proposals under the Building Safety Levy might mean for housing associations.

What does Rent to Buy mean from a VAT perspective?

RSM have summarised what Rent to Buy might mean for Registered Providers in relation to tax.

Off payroll working (IR35) obligations to continue

The Chancellor announced that the off payroll working rules are to continue. Now is a good time to check the level of your compliance with IR35 obligations.

How to support a Partial Exemption Special Method application to HMRC

Discussions between the NHF and HMRC has highlighted some ways in which a housing association can support HMRC in reviewing a PESM application.

Widening the availability of section 71 registered social landlord relief

HMRC has updated its guidance to cover a number of scenarios around section 71.

VAT reliefs for decarbonisation works

VAT on energy saving materials will be reduced from 5% to 0% from April 2022 to April 2027, although there are practical questions which arise as a result of trying to maximise these reliefs.

Changes and challenges to partial exemption special methods

There have been recent examples where applications to update a partial exemption special method have been rejected by HMRC, even when the areas of concern for HMRC in the current applications were previously approved.

Employment tax checklist for hybrid working

With ways of working changing to hybrid working roles, RSM have created advice for housing associations to ensure that as an employer you remain compliant with employment tax obligations. 

Tax Incentives for decarbonisation 

RSM have explained the tax incentives that will aid housing associations to play their part in reaching the national net zero targets by 2050. 

Common mistakes in Stamp Duty Land Tax returns

HMRC is writing to housing associations that have submitted Stamp Duty Land Tax returns in recent years and have potentially failed to account for higher rates of tax. 

Exemptions under the Residential Property Developer Tax

Following our calls for an exemption, the government have announced that the Residential Property Developer Tax will not be payable by non-profit registered providers of social housing and their wholly owned subsidiary companies.

Update on the Building Safety Levy call for exemption

We've summarised what the Building Safety Levy could mean for housing associations and the need for a sector-wide exemption to be introduced.

Potential challenges to cost sharing exemption arrangements

HMRC have raised concerns around the application of the cost sharing exemption. We've summarised what this might mean for housing associations and what steps they can take.

Tax update: Residential Property Developer Tax

HM Treasury have launched a consultation on the policy design of a Residential Property Developer Tax to be introduced from 1 April 2022.

VAT grouping consultation – no changes expected following sector response

HM Treasury have decided not to consult further on possible changes to UK VAT grouping rules following responses to the recent call for evidence.

Changes to dissolution clause under Model Rules

Following discussions with HM Revenue and Customs (HMRC), the NHF has agreed to update its Model Rules for charitable Registered Providers.

Design and build companies for VAT purposes: the importance of getting it right

We've summarised some of the key issues and areas that must be considered when setting up design and build companies for VAT purposes.

Making Tax Digital

Most housing associations are successfully submitting their VAT returns under the Making Tax Digital regime. Arguably, however, the real challenge will come when the ‘digital link’ soft landing period ends in April 2021.

VAT grouping consultation – NHF response

HM Treasury issued a Call for Evidence in November 2020 in relation to VAT grouping. We have responded and recommended that the UK does not introduce compulsory VAT grouping.

Domestic Reverse Charge and Construction Industry Scheme update

The Domestic Reverse Charge for the construction industry is set to be introduced on 1 March 2021, with new rules bringing practical and financial challenges for housing associations. HMRC is also running an awareness drive about organisations' obligations under the Construction Industry Scheme.

Changes to off-payroll working from April 2021

The government has passed legislation confirming that the new IR35 rules will be introduced from April 2021. It is important that housing associations plan for these changes and that processes are in place to ensure that the new obligations are met.