This update from the Treasury brings some clarity about who will be considered to be a 'developer' under this new levy. It will apply to profits from housing development greater than £25m. Welcome news no doubt to smaller developers and contractors who fall under the threshold.
How this tax will eventually be implemented is not yet known. The Treasury will have a tricky task balancing the obvious need to remedy unsafe cladding against developers having to add this cost to the other cost increases in their supply chains. Will this impact on political aspirations to increase housebuilding?
The Treasury has unveiled new plans for a £2bn, 10-year tax on developers, due to be introduced from 2022. The levy is designed to help fund remediation of cladding on high-rise residential buildings, the UK Government said. It will be applied to housing development company profits of more than £25m. It was first announced in February without any definition of the entities that the government considered to be developers.