Summary of the main political party tax measures
Summary of the main political party tax measures
Mon 02 Dec 2019
In this note we summaries some of the tax points from the main political party manifestos and highlight some issues taxpayers might like to consider (separate advice on the consequences of any action taken in response to the comments below should always be taken). If you would like to discuss any of these points, please get in touch with one of the Mazars international, corporate, personal or indirect tax teams.
Corporation Tax Rates
| Labour | Increase to 26% in three years (and 21% SME rate) Consider formulary apportionment for MNEs Windfall tax on oil companies Publication of large company tax returns and limitation on ATCAs |
| Liberal Democrat | 20% |
| Conservative | 19% |
| Scottish National Party | Measures to improve the transparency and contribution of MNE’s to local taxes |
| Plaid Cymru | 19% CT rate |
Corporate Reliefs
| Labour | Replace R&D Expenditure Credit (RDEC) with investment funding. Review all corporate tax reliefs |
| Liberal Democrat | Allow claims of R&D tax credits against the cost of purchasing datasets and cloud computing |
| Conservative | Increase RDEC to 13% and SBA’s to 3% |
| Scottish National Party | Support tax incentives for creative industries |
| Plaid Cymru |
Inclusive Ownership Funds
| Labour | 10% of shares in large Cos to be held by workforce with limit on dividends payable to workers |
| Liberal Democrat | Employees of listed companies with 250+ employees – to be given the right to request shares to be held in trust for benefit of employees |
| Conservative | |
| Scottish National Party | |
| Plaid Cymru |
Income Tax Rates
| Labour | 45% threshold reduced to £80k and super rate for earnings above £125k. Freeze income tax and NI for those earning below £80k |
| Liberal Democrat | 1p increase on income tax rates (presumably to 21%, 41% and 46%) |
| Conservatives | No increase in income tax rates for duration of parliament |
| Scottish National Party | |
| Plaid Cymru | Restrict income tax relief on pension contributions to 20% |
Employment Issues
| Labour | Create a new worker status; reform workers’ rights; introduce four new bank holidays. Introduce a 20 to 1 high pay cap and also a levy on high pay by companies |
| Liberal Democrat | Reconsider IR35 changes; introduce new ‘dependent contractor status; set 20% higher minimum wage for zero hrs contracts. Bring GIG workers within pension reforms |
| Conservatives | No increase in NIC rates for duration of parliament. Raise NIC threshold to £9.5k. Increase employment allowance to £4k |
| Scottish National Party | Increase employers’ NIC allowance from £3k to £6k. Review IR35. Press for a number of employee pay and pension reforms |
| Plaid Cymru | Increase rate of NIC for higher and additional rate taxpayers from 2% to 4% |
Taxes on Investment
| Labour | CGT and dividends to be taxed at marginal rates with a single annual allowance (possibly £1k). Remove existing CGT and dividend annual allowances but do not tax ‘risk free’ returns. Scrap non-dom status |
| Liberal Democrat | Abolish CGT allowance and tax gains at same rates as income. |
| Conservative | |
| Scottish National Party | |
| Plaid Cymru |
Business incentives
| Labour | Scrap entrepreneur’s relief |
| Liberal Democrat | Simplify business tax and support SMEs |
| Conservative | Reform entrepreneurs’ relief. Redesign the tax system to boost wages, growth and investment |
| Scottish National Party | |
| Plaid Cymru |
Indirect Tax
| Labour | VAT on private school fees. Substantial expansion of stamp duty |
| Liberal Democrat | Introduce soft drinks levy on milk drinks |
| Conservative | No increase in VAT rates for duration of parliament. Get rid of VAT on women’s sanitary products. Review alcohol duties |
| Scottish National Party | Reduce VAT in hospitality sector; freeze IPT rates; reform vehicle taxes; reduce VAT on residential energy saving measures; reform excise duties particularly on Scottish Whiskey. Freeze VAT and NIC costs for households |
| Plaid Cymru | Devolve Air passenger duty and VAT to Wales |
Property Matters
| Labour | Consider replacing business rates with land value tax; Introduced open ended tenancies and increase controls on residential landlords. Limit access to SSE for foreign invest property rich companies. See also avoidance |
| Liberal Democrat | Replace business rates with a land value levy |
| Conservative | 3% extra SDLT for non-UK buyers of UK residential property. Reform of business rates and reduce rates for retailers. Plan for 300k new homes/yr by end of parliament |
| Scottish National Party | |
| Plaid Cymru |
Inheritance Tax
| Labour | Reverse George Osbourne measures (remove relief for main residence?) |
Avoidance
| Labour | £6bn/yr by 2023/24 saved through more targeted HMRC audits and an offshore property company levy (20%). Introduce a general anti-avoidance rule |
| Liberal Democrat | £5.7bn by 2024/25 from introducing general anti-avoidance rule and reform of permanent establishment rule |
| Conservative | Tackle CIS abuse, and abuse of uncertain tax positions. Beef up HMRC anti-tax evasion unit – extra £200m/yr by 2023/24 |
| Scottish National Party | Work towards tackling international tax avoidance |
| Plaid Cymru |
Transaction and tax points that may be worth considering could include:
- Those subject to capital gains tax might like to consider whether to make disposals sooner rather than later;
- For those able to plan when they can receive income, might like to consider whether should receive it sooner rather than later;
- Review the base cost of investments and the implications of possible tax changes;
- Consider the planning around provision for school fees;
- Review the timing of residential real estate purchases;
- Consider the tax impact of the timing of qualifying research and development expenditure;
- Financial services businesses may want to consider impact of Labour’s proposed expansion of stamp duty;
- Take out full ISA allowances to the extent possible.
The information contained in this note does not constitute individual advice. Mazars will not accept any responsibility for decisions taken or not taken on the basis of the information presented. Always obtain independent, professional advice relevant to your own circumstances.
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