Posted: 10/12/19 by Elsby & Co.
With the General Election looming this week, Elsby & Co thought it might be helpful to summarise the tax policies of the main parties, based on their manifesto proposals.
The key point to note is that the Conservatives had pledged to reduce corporation tax to 17% from April 2020, however, they have now said they will maintain the corporation tax rate at 19%.
The Tories are offering a 1% increase in Research & Development tax credits and the structures and buildings allowance, along with a £1,000 increase in the employment allowance.
They have also promised that they won’t increase the rates of income tax, VAT and NI, and will eventually increase the NI threshold so that it is in line with income tax (£12,500).
The Labour manifesto commits to tax dividends and capital gains tax at income tax rates, and increase income tax rates for those earning more than £80,000 per annum. Income or capital gains over £125,000 will be taxed at 50%.
Labour also plans to abolish entrepreneurs relief, the marriage allowance and R&D tax credits (for large companies).
Labour would like to reintroduce the small profits rate for corporation tax. The small profits rate will be 21% and the main rate of corporation tax will reach 26% by 2022.
There are also changes to VAT in that 20% VAT will be introduced on private school fees along with a 200% council tax levy on holiday homes under a Labour government.
The Liberal Democrat manifesto commits the Party to propose 1% increases to income tax and corporation tax rates. They also want to abolish the capital gains annual exemption and increase council tax on second homes by 500%.
The Liberal Democrats also plan to expand the apprenticeship levy and the scope of Research & Development tax credits.
Whichever Party you decide to vote for on Thursday, the important thing is to vote.
Source: indicator - flm