Our latest Pay Less Tax newsletter is now available, highlighting practical tax savings and planning points for individuals and business owners.
This edition focuses on the 5% VAT rule for construction, land remediation relief, changes to the state pension replacement credits service, and vulnerable person’s trusts.
Construction services – the 5% VAT rule
Certain residential construction work can be charged at 5% VAT rather than 20%, yet 25 years after the rules were introduced, many builders and their customers are still missing out. Qualifying work includes converting a non-residential building to residential use, renovating a property that has been empty for at least two years, or changing the number of dwellings on a site. Where 20% has been charged incorrectly, the customer can approach the builder for a refund of the difference, so it’s worth checking the right rate is being applied.
Land Remediation Relief (LRR)
As the Government pushes to build 1.5 million new homes, Land Remediation Relief offers a valuable incentive for companies bringing contaminated or derelict land back into productive use. A successful claim can provide a corporation tax deduction of 150% of the qualifying remedial expenditure, or a 16% tax credit for loss-making companies. Qualifying costs can include materials, staffing, subcontracted work and related professional fees.
State pension – at a loss?
The National Insurance Replacement Credits Service (NIRCS), which helps certain parents and carers fill gaps in their National Insurance record, has been delayed from April 2026 to April 2027. Most people won’t be affected, but some already receiving the state pension, or reaching state pension age before April 2027, could see a short-term loss. If that applies to you, it may be possible to ask HMRC to review your case where the delay causes a financial loss.
Vulnerable Person’s Trust (VPT)
A Vulnerable Person’s Trust can provide financial security for a vulnerable beneficiary while offering tax advantages that most other trusts don’t enjoy, including favourable treatment for inheritance tax, income tax and capital gains. Care is needed when setting one up, as a CGT charge or additional land taxes can arise in certain circumstances. We have access to trust specialists who can help.