Readers of this post will probably be aware of the December election results – this post was written the day before the election. What can we expect? Here’s a quick summary of what the two main parties have promised to enact from a tax point of view. It remains to be seen if the winners will fulfil these wish-lists.
Conservative Party
- No increases in the rate of Income Tax, VAT or National Insurance.
- Raise the National Insurance threshold to £9,500 from next year.
- The triple lock on State Pension to be retained as will the Winter Fuel Payment and other pensioner benefits.
- A reduction in business rates.
- Increase the National Insurance Employment Allowance.
- Clamp down on late payers of business accounts.
- Increase the R & D tax credit to 13%.
- Reforms promised to CGT Entrepreneurs’ Relief.
- Introduce new tax anti-avoidance legislation.
Labour Party
- Landlords – rent caps, open-ended tenancies.
- Abolish leasehold property sales, give existing leaseholders rights to buy freehold at reasonable price.
- Free university tuition fees.
- Increase Corporation Tax for smaller businesses to 21% and larger concerns (turnover in excess of £300,000) to £26%.
- A review of Corporation Tax Reliefs.
- Living Wage increase to £10 per hour.
- Additional tax for higher income earners (Incomes in excess of £70,000 to £80,000 per year).
- New 50% rate of Income Tax for those earning in excess of £125,000.
- Dividends and capital gains to be taxed within the same band structure as income.
All of which is pure speculation as until we see the first Finance Bill, from the new government, these changes could be expanded or reduced.
Hopefully, the new year will see an end to the uncertainty that has plagued British politics for the last two years.
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