Election Manifesto Week - What do they really mean?

16th April 2015

So the Election Manifestos were launched this week. I have summarised the main tax issues contained in the parties manifestos. As we have a Green MP in Brighton, I have included the Green tax issues.

The first manifesto to be launched this week  was from Labour and included:

Labour:

Income Tax

Introduce a top rate of income tax of 50% for those with income over £150,000 a year

Maintain the 20% and 40% income tax rates

Introduce a 10% starting rate of tax

End the marriage tax allowance

Abolish non-dom status

Other

Introduce a mansion tax on properties worth more than £2 million

General

Tackle tax avoidance

Then came the Conservative and Green manifestos:

Conservative:

Income Tax

Increase the tax-free personal allowance to £12,500

Raise the 40% tax band starting point to £50,000 (from £42,385)

Cut pension tax relief for persons earning more than £150,000

Abolish employers NI for young apprentices under 25

Increase tax charge paid by non-doms

Business

Set new permanent Annual Investment Allowance for capital investment in business equipment

New tax credit for children’s TV

Changes to allow farmers to spread their profits for tax over 5 years to counter income volatility.

Other

Increase Inheritance tax threshold for married couples/civil partners to £1 million with a transferable main residence allowance of £175,000 per person

General

Tackle tax evasion and aggressive tax avoidance and tax planning

Green

Income Tax

Raise the top rate of income tax to 60%

Removing tax deductions against a variety of expenses on buy to let properties including mortgage interest and reforming the “wear and tear” allowance

Introduce a wealth tax of 2% per year on the top 1%

Abolish capital gains tax annual exemption

Abolish non-dom status

Abolish  the employee’s NI upper threshold

Business

Raise corporation tax for large companies to 30%

Abolish corporation tax relief on any salary that exceeds a maximum 10:1 maximum/minimum salary ratio in any company.

Gradually reduce Employer’s NI to 8%

Reduce VAT on housing renovation and repair work to 5%

Extend VAT to “less healthy food “, including sugar

Reduce VAT to 5% on cooked food accommodation and entertainment

Other

Phase out Stamp Duty Land Tax and consider a Land Value Tax

Introduce a “Robin Hood” transaction tax of 0.1% on bonds, equities and derivatives to replace stamp duty on shares.

Reform inheritance tax so that the tax payable depends on the wealth of the recipient, not the donor

Abolish potentially exempt transfers for inheritance tax

General

Tighten up the rules for certain Trusts used for inheritance tax purposes.

Introduce a “Tax Dodging Bill”

Increase HMRC staff by 15,000 per year to improve tax collection

Consider making tax avoidance schemes illegal

 

The last party to launch their manifesto were the Liberal Democrats: 

Liberal Democrats

Income Tax

Increase the tax free personal allowance to £12,500

Consider raising the NI threshold to the tax threshold

Increase tax charge for non-doms and ending the ability to inherit non-dom status.

Review tax relief for pension contributions with a view to introducing a single rate of tax relief.

Reform taxation of dividend income

Business

Introduce supplementary corporation tax for the banking sector

Other

Reform capital gains tax

Introduce High Value Property Tax on properties valued more than £2 million

General

Introduce a general anti-avoidance rule

Introduce a new offence of corporate failure which includes tax evasion with penalties of custodial sentences

Introduce penalties on firms facilitating tax evasion

 

 

 

Written by Karen Oliver, Tax Manager

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