Will I pay more tax after the general election?
As the 2024 General Election approaches, voters are faced with making a critical decision that will shape the nation’s future, you should never underestimate the power of your vote when it comes to a General Election!
The political landscape is highly polarised, and each major party presents a distinct vision for the country.
We asked our tax team to take a look at the main party general election manifestos and provide us with an easy to read high-level view which compared the parties’ election manifestos, focusing on how their key policies and promises will impact on UK taxpayers. Take a look at our table below which sets out and compares some of the proposed changes in the UK 2024 General Election.
This table comes with disclaimers! This overview is in no way comprehensive it is set out to provide you with an unbiased overview which might help you make an informed choice at the General Election ballot box. The table below should be read in conjunction with the notes below which are taken directly from the party manifesto.
If you would like to speak to a member of our tax team about your personal or business tax affairs you can contact us on 020 7870 9050 or email us at hello@rpgcc.co.uk, a member of our team is waiting to help you achieve your goals.
Download our 2024 General Election manifesto comparison table
The Conservative and Unionist Party manifesto 2024 – General Election
The Conservatives have announced several tax measures in their manifesto.
Income Tax
The rate of income tax will not be increased.
The tax-free personal allowance will be increased by introducing a new age-related personal allowance from April 2025. This is said to amount to a tax cut of £100 for 8m pensioners rising to £275 tax saving at the end of the parliament.
No new taxes on pensions will be introduced. The 25% tax-free lump sum and tax relief on pension contributions at their marginal rate will remain. National Insurance will not extend to employer pen-sion contributions.
Key tax incentives used to encourage small businesses to grow by providing generous income tax (En-terprise Investment Scheme, Seed Enterprise Investment Scheme, Venture Capital Trusts) will remain.
National Insurance Contributions
Employee’ NIC will be cut by another 2p to get to a rate of 6% by April 2027. Their long-term ambition, when it is affordable to do so, is to keep cutting National Insurance until it’s gone.
To support the self-employed the Conservatives pledges to abolish the main rate of self-employed Na-tional Insurance entirely by the end of the Parliament.
Business Taxation
The corporation tax rate will not be raised.
The full expensing capital allowance regime will be extended to leasing when fiscal conditions allow.
A pledge that creative sector tax incentives remain competitive. R&D regime tax relief will remain.
More Freeports and Business Rates Retention zones will be created.
Capital Gains Tax (CGT)
The capital gains tax will not be increased.
The valuable CGT relief for individuals selling their business known as Business Asset Disposal Relief will be retained.
The Conservatives will maintain Private Residence Relief so that people’s homes are protected from CGT.
To support homeowners, a two-year temporary Capital Gains Tax relief will be introduced for landlords who sell to their existing tenants.
Inheritance Tax (IHT)
The relief which exempts businesses and agricultural land from IHT known as Agricultural Property Re-lief and Business Relief will be retained.
Value Added Tax (VAT)
The VAT rate will not be increased although the VAT threshold will remain under review. Options to smooth the cliff edge at £90,000 will be explored.
Stamp Duty Land Tax (SDLT)
The threshold at which first-time buyers pay Stamp Duty will be increased to £425,000 from £300,000.
The rate and level of SDLT will not be increased to support homeowners.
Environmental Taxes
No new green levies will be introduced.
Child Benefit
Child benefit would be assessed at the household level and there would be no reduction for couples earning up to £120,000. Beyond this amount, there will be a gradual reduction until household income reaches £160,000, above which families will no longer receive Child Benefit.
The Labour manifesto 2024 – General Election
If the polls are to be believed, Labour will be the largest party in Parliament and thus form the next Government with a large majority.
What have they said about tax in their manifesto?
Personal taxation
It was confirmed that the basic, higher and additional rates of income tax will not be increased. They have said they will crack down on non-dom loopholes by abolishing non-dom status. However, they will introduce a scheme for people coming to the UK for a short period. It is expected that these proposals are expected to raise revenues of £5,230m. Another area mentioned was concerning carried interest. Labour have said they will close this tax loophole where performance-related pay is liable to capital gains tax. This proposal is expected to raise £565m.
Business Taxation
The corporation tax rate will be capped at the current rate of 25% for the entire parliament but they have suggested this may change stance if ‘other countries pose a risk to UK competitiveness’. The capital full expensing system and the annual investment allowance for small businesses will remain. National Insurance Contributions (NIC) and related levies. NIC rates will not be increased.
The Apprenticeships Levy, which is usually paid by larger employers will be replaced with a Growth and Skills Levy to help pay for various training schemes etc.
Inheritance Tax (IHT)
One reason a person may set up a trust is to avoid IHT. Labour has stated they will stop this for those who make their home here.
Value Added Tax (VAT)
Labour stated they will not increase VAT.
The biggest headlining-grabbing measure is to remove the VAT exemption for private school. The application of VAT and business rates to private schools is expected to raise £1,510m.
Stamp Taxes Land Tax (SDLT)
Currently, non-UK residents purchasing residential property have to pay higher SDLT due to the application of a 2% surcharge. Labour has stated they will increase this surcharge by 1% which is expected to raise £40m which will be used to fund additional planning officers.
Business Rates System
In England, Labour stated they will replace the business rates system, so that it can raise the same revenue but in a ‘fairer’ way.
Energy Taxation
Labour will extend the sunset clause in the Energy Profits Levy as well as increasing the levy rate by 3%.
Labour will close the loopholes in the windfall tax on oil and gas companies.
Other
Labour stated they will modernise HMRC and change the law to tackle tax avoidance. There will in-crease in registration and reporting requirements, HMRC’s powers will be strengthened, investment in new technology and an increase in capacity within HMRC. There will be a renewed focus on tax avoidance by large businesses and the wealthy.
Liberal Democrats manifesto 2024 – General Election
The Liberal Democrats have several very interesting tax proposals in their manifesto.
Income Tax
Income tax will not be raised.
Capital Gains Tax (CGT)
Certain loopholes used by the super-wealthy will be closed.
National Insurance Contributions (NIC)
NIC will not be raised.
The NIC status and tax status of employees, dependent contractors and freelancers will be reviewed.
Business Taxes
The off-payroll working rules (IR35) will be reviewed.
Business rates will be replaced with a Commercial Landowner Levy.
Digital Services Tax on social media forms and other tech giants will be increased to 6% from 2%.
A new levy on the profits of tobacco companies will be introduced.
They would impose a proper, one-off windfall tax on the super-profits of oil and gas producers.
Tax cuts for the big banks, restoring Bank Surcharge and Bank Levy revenues to 2016 levels in real terms.
A Sewage Tax will be introduced on water company profits.
Employment Taxes
The apprenticeship levy will be replaced with a broader and more flexible skills and training levy.
Value Added Tax (VAT)
VAT will not be raised.
VAT on children’s toothbrushes and toothpaste will be scrapped.
VAT on public charging points will be reduced to 5%.
The VAT exemption for private, first class and business-class flights will be removed.
Stamp Duty and Stamp Duty Land Tax
A 4% tax will be introduced on share buyback schemes of FTSE 100 companies.
The Liberal Democrats will all councils to increase council tax by up to 500% where homes are being bought as second homes, with a stamp duty surcharge on overseas residents purchasing such properties.
Other
Excise duty will be reviewed for the Whisky industry.
Rural Fuel duty will be expanded.
2024 Reform UK manifesto (‘contract’) – General Election
Reform UK is the new political party on the ‘block’ and they are polling just behind the Conservatives.
The party has called their manifesto a ‘contract’.
Let’s see what their tax policies are.
Income Tax
One headlining grabbing proposal is to raise the income levels before individuals start paying income tax to £20,000.
The basic rate of income tax will stay at 20%. The higher rate will begin to be payable when an individ-ual’s income hits £70,000.
As soon as finances allow, Reform would like to introduce a UK 25% transferable marriage tax allow-ance. This would mean no tax on the first £25,000 of income for either spouse.
Employment taxes
A new measure known Employer Immigration Tax will be introduced for foreign workers. This would work by increasing the National Insurance rate to 20%. Essential foreign workers, care workers and businesses that employ 5 or fewer employees will be exempt from these proposals.
Business Taxes
The main rate of Corporation Tax Rate will be cut from 25% to 20%, then to 15% from year 3.
The IR35 rules apply to personal service companies and some partnerships will be abolished.
Business rates for SMEs based on high streets will be abolished.
The business rates abolition mentioned above will offset with an Online Delivery Tax at 4% which will be payable by large multinational enterprises.
Inheritance Tax (IHT)
IHT will be abolished for estates under £2m. Estates above the £2m will be liable to IHT at 20%.
Value Added Tax (VAT)
The VAT registration threshold will be increased to £150,000.
There will be tax relief of 20% on all independent education. There will be no VAT on fees.
VAT on energy bills will be scrapped.
It is proposed that the ‘VAT Tourist Tax’ will be abolished.
Stamp Duty Land Tax (SDLT) – Residential
SDLT will be cut to 0% for purchases below £750,000.
Purchases between £750,000 to £1,500,000 will have the SDLT reduced to 2%.
For purchases exceeding £1,500,000 will have the SDLT cut to 4%.
Environmental Taxes
Fuel duty will be reduced by 20p for both residential and business users.
Environmental levies will be scrapped.
Other measures
Basic rate (20%) tax relief will be available on all private healthcare and insurance.
The Green Party manifesto 2024 General Election
The Green Party has stated several tax changes they would want to see and thus campaign for.
Income Tax
There would be no increase in the basic income tax rate during this cost-of-living crisis.
Investment income would be taxed at the same rate as earned income. This will be done by aligning the investment income taxation with the tax and NIC rates on employment income.
Pension tax relief would be at the basic rate of tax.
National Insurance Contributions (NIC)
Investment income will be liable to NIC at the same rate as employment income.
The Greens would also remove the Upper Earnings Limit that restricts the amount of National Insurance paid by high earners.
Business Taxation
A new windfall tax on oil and gas production.
Introduction of a windfall tax on banks when excessive profits.
Inheritance Tax (IHT)
IHT would be reformed.
Value Added Tax (VAT)
VAT will be reduced to incentivise the growth of solar and other renewables.
Private schools will charge the full rate of VAT on fees. Private school places for children with special education needs will not be subject to VAT.
The Greens would propose a range of VAT changes which include reducing VAT on several areas such as hospitality and the arts but increasing it on financial services and private education.
The Greens would also campaign to exempt cultural events, including everything from theatre and museum tickets to gigs in local pubs from VAT.
Environmental taxes
They would make road tax proportional to vehicle weight.
A carbon tax would be introduced at the initial rate of £120 per tonne, rising to a maximum of £500 per tonne of carbon emitted within ten years.
A carbon tax would apply to all kerosene for aviation sold in the UK.
Other measures
The Greens would push for a wealth tax aimed at wealthy individuals with assets above £10 million be-ing taxed at 1% and assets above £1bn at 2% annually.
A long-term policy aim is to introduce a Land Value Tax targeting those with the most valuable and largest land holdings. In the next parliament, elected Greens will take steps towards this by pushing for:
• Re-evaluation of Council Tax bands to reflect big changes in value since 1990s.
• Removal of business rate relief on Enterprise Zones, Freeports, petrol stations and most empty properties.
• A survey of all landholdings to pave the way for fair taxation of land
