The residential property developer tax in practice

The autumn Budget on 27 October 2021 included the important announcement that residential property development tax (RPDT) will be levied at 4% on companies or groups of companies undertaking UK residential property development with annual profits in excess of £25m. It is expected to operate for only ten years although keen historians might note that income tax when first introduced on 9 January 1799 by William Pitt the Younger was ‘a temporary measure’ and had a reassuringly low rate of just under 1% on annual incomes of £60 a year (about £7 000 according to the Bank of England’s inflation calculator to 2020) although increasing on a graduating scale for higher incomes.

The policy objective of this new tax is clearly that there are: ‘significant costs associated with the removal of unsafe cladding’ and so ‘the government believes it is right to seek a fair contribution from...