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:
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
Introduce a mansion tax on properties worth more than £2 million
Tackle tax avoidance
Then came the Conservative and Green manifestos:
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
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.
Increase Inheritance tax threshold for married couples/civil partners to £1 million with a transferable main residence allowance of £175,000 per person
Tackle tax evasion and aggressive tax avoidance and tax planning
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
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
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
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:
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
Introduce supplementary corporation tax for the banking sector
Reform capital gains tax
Introduce High Value Property Tax on properties valued more than £2 million
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