General Election 2019: Tax plans from the political parties

09 December 2019

With so much political noise and uncertainty it is difficult to make any informed plans for the future.

However, the recently released manifestos and costing from each of the political parties provide some promises and clues - so we have summarised the main tax changes expected from the three main UK political parties.

Of course, the extent to which any party will fulfil their election promises remains to be seen! Most of these plans seem more achievable than Trump’s wall, but how many will actually be in place five years from now?

Political parties tax plans 

 
Conservative Party
Labour Party
Liberal Democrats
Income Tax
  • Promised not to raise
  • Increase (to 45% tax above £80k, 50% above £125k, otherwise frozen
  • Tax income from wealth at same rate as employment income. 
  • Scrap married couples allowance.
  • Add 1p to all income tax rates
  • Scrap married couples allowance.
Capital Gains Tax
  • Reform of Entrepreneurs' Relief
  • Replace annual exemption with de-minimis £1k allowance
  • Scrap Entrepreneurs' Relief.
  • Abolish annual allowance; one allowance for gains and salaries
Corporation Tax
  • Remain at 19%?
  • Increase main rate to 26% by April 2022 (21% small profits rate by April 2021)
  • Review of reliefs
  • Unitary taxation of multi-national groups; profits declared where activity occurs.
  • Increase to 20% and keep rate stable
  • Reform PE rules to stop multinationals shifting profit out of UK
  • Support OECD on taxation of multinationals.
NIC
  • Promised not to raise
  • Increase threshold to £9.5k in 2020/21 and eventually to £12,500
  • Increase employer allowance from £3k to £4k
  • Employer NIC 1 yr holiday for ex-armed forces.
  • Promised not to raise
 
IHT
 
  • Reverse planned cuts
 
VAT
  • Promised not to raise
  • Remove from female sanitary products
  • Promised not to raise
  • Remove charitable status VAT reliefs from private schools.
  • 5% for electronic vehicles
  • Remove from female sanitary products
  • Refunding for colleges.
Pensions
  • Retain "triple lock" guarantee
  • Address loophole for net pay schemes for those on £10-12k.
  • Retain "triple lock" guarantee
  • Abandon plans to raise State Pension Age.
  • Review to protect those in the gig economy.
R&D
  • Increase tax credit to 13%
  • Review scope (esp. cloud accounting and data).
  • Increased support
  • Phase out R&D credits for large corporations, and Patent Box.
  • Increase national spending on R&D and creative industry tax support
  • Allow R&D credit claim against cost of datasets & cloud accounting.
Capital Allowances
  • Increase SBAs to 3%
 
 
Stamp Duties
  • 3% SDLT surcharge for non-res acquiring UK property
  • 20% Offshore Company Property Levy in addition to SDLT 
  • Extend Stamp Duty Reserve Tax.
  • SDLT surcharge for non-residents purchasing second homes
Employment Related
  • Further increases to National Living Wage
  • Introduce Real Living Wage of at least £10ph for >16yos
  • Employee share ownership requirement for large companies (>250 e'ees)
  • Single status of "worker" for all except genuine self-employed
  • Reform Apprenticeship Levy
  • Excessive pay levy for employer where employees earn >£330k.
  • Review Living Wage and increase minimum wage for zero hours
  • Employee rights to request shares in listed companies (>250 e'ees)
  • New "dependent contractor" status between emp/self-emp
  • End loan charge and review IR35 proposals
  • Expand Apprenticeship Levy.
Business Rates etc
  • Business rates enhancement/extension for some businesses
  • Review support for self-employed.
  • Review of land value tax alternative to business rates (commercial landlords)
  • Replace business rates with commercial landowner levy
  • Simplification of business taxation and "start up" allowance.
Other
  • Consolidate anti-evasion and avoidance rules
  • Increase digital services tax
  • Plastic packaging tax
  • Soft drinks levy extended to milk 
  • Windfall tax on oil companies
  • Reverse cuts to Bank Levy
  • New levy on overseas companies buying housing
  • Up to 200% council tax increase for second homes, and empty property tax
  • New general anti-avoidance rule and tax gap reduction target
  • Improve digital services tax
  • Air passenger duty increased/reduced for frequent/occasional flyers
  • Up to 500% council tax increase for second homes

 

Find out more

Contact Tax Director, Steven Tebbutt to find out more about how we can help the plans for your business.