How might tax policy change after the general election?
With the 2024 General Election around the corner, the UK’s tax policy is likely to change depending on which party gets in to power, affecting individuals and businesses operating in the country.
The Conservative Party
The Conservative Party plans to:
Lower employees' National Insurance Contributions (NIC) from 8% to 6% by 2027.
Reduce self-employed NIC rates, aiming for abolition by 2029.
Introduce a new income tax allowance for older people from April 2025.
Reform child benefit charges to focus on household income.
Maintain higher Stamp Duty Land Tax (SDLT) thresholds for first-time buyers.
Offer temporary capital gains tax relief for landlords selling to tenants.
Funding will come from tackling tax avoidance and evasion, aiming to raise £20bn over five years.
The Labour Party
Labour focuses on reducing tax avoidance by investing in HMRC to generate an additional £5.2bn by 2028/29. They also propose:
VAT on private school fees.
Taxing carried interest as income.
Higher SDLT rates for non-UK residents.
Closing loopholes in windfall taxes for oil and gas companies.
They commit to not increasing NIC, income tax, or VAT rates.
The Liberal Democrats
The Liberal Democrats' tax plans include:
Raising £26.9bn by 2028-29 through various new taxes and reforms.
Increasing the CGT annual exempt amount and introducing new allowances.
Allocating £1bn to HMRC to target tax evasion and avoidance.
They also plan changes for employers, employees, and freelancers, including reviewing off-payroll working reforms.
The Green Party
The Green Party proposes:
A wealth tax on assets over £10m.
Reforms to inheritance tax.
Aligning capital gains tax (CGT) rates with income tax.
Higher NIC rates for earnings above £50,270.
Carbon taxes to raise additional revenue.
They aim to increase tax receipts by £50bn to £70bn annually.
The Reform Party
The Reform Party aims to simplify and cut taxes, including:
Raising the income tax personal allowance to £20,000 and the 40% threshold to £70,000.
Abolishing inheritance tax on estates under £2m.
Significant cuts to SDLT and scrapping VAT on household energy bills.
Reducing corporation tax from 25% to 15%.
Increasing the VAT registration threshold to £150,000.
These summaries provide an overview of the main parties' tax policies for the 2024 general election. Regardless of the outcome, you can rest assured that at Malones we keep a close eye on any developments and will be able to help our clients navigate any changes that may come around. If you’d like to read more detailed plans, we suggest you refer to each party's manifesto or see the ICAEW website for a more comprehensive overview.