Business Matters – Issue 36
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General election special
Ahead of the general election on 4th July, the UK’s attention has been drawn to what the result might mean for personal and business finances, as well as the public purse.
The three main parties have now issued their manifestos and costings, giving us the clearest understanding yet of what they’re offering.
Amid a host of commentary online, we’re cutting through the noise with a breakdown of the key takeaways for our Business Matters readers:
| Party | Conservative | Labour | Liberal Democrats |
|---|---|---|---|
| Documents* | Manifesto, Costings | Manifesto, Fiscal Plan | Manifesto, Costings |
| Income tax | “No increase in income tax.”
‘Triple lock Plus’ to apply to the personal allowance of those of state pension age, with annual increases mirroring those of the state pension. Move the High Income Child Benefit Charge onto a household basis with taper starting at a joint income threshold of £120,000 and ending at £160,000. All other existing allowances and band freezes continue. |
“…will not increase…the basic, higher or additional rates of Income Tax.” Existing allowance and band freezes continue. |
“End retrospective tax changes such as the loan charge…and review the Government’s off-payroll working IR35 reforms…” Review “the tax and National Insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.” “When the public finances allow”, the priority will be to raise the personal allowance. |
| Capital Gains Tax | “…will not increase Capital Gains Tax.” Retain Business Asset Disposal Relief. |
End CGT treatment of carried interest. No other comments. |
Increase annual exemption to £5,000 and base tax solely on gains. 45% rate for gains exceeding £100,000, 40% between £50,000 and £100,000, and 20% on other gains. Introduce a new small business relief. |
| NICS | One percentage point reduction to main employee NICs rate in April 2025 and April 2027, bringing it down to 6%. 2% rate above UEL unchanged. Reduce self-employed main rate by one percentage point each year from April 2025 to 2% in April 2028 and then abolish it in April 2029. 2% rate above UPL unchanged. Existing Class 1 and Class 4 threshold freezes continue. |
“…will not increase National Insurance.” | Review “the tax and National Insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.” |
| Inheritance Tax | Retain business relief and agricultural relief. | No comment. | No comment. |
| Stamp duties | Make permanent the £425,000 SDLT 0% threshold for first-time buyers who pay Stamp Duty Land Tax. “…will not increase the rate or level of Stamp Duties.” |
Increase the rate of the residential SDLT surcharge paid by non-UK residents by one percentage point. | SDLT surcharge on purchase of second homes by overseas residents. |
| Corporation and business tax | No increase in Corporation tax. No increase in VAT. Maintain R&D reliefs. |
“…publish a roadmap for business taxation for the next parliament.” “…cap Corporation tax at the current level of 25 per cent.” ‘”…will not increase…EVAT.” “…retain a permanent full expensing system for capital investment and the annual investment allowance for small business. And…give firms greater clarity on what qualifies for allowances.” |
Make the case for increasing the global minimum rate of Corporation tax to 21%. Restore the Bank Surcharge and Bank Levy revenues to 2016 levels in real terms. Increase the Digital Services Tax on social media firms and other tech giants from 2% to 6%. Introduce a 4% tax on the share buyback schemes of FTSE-100 listed companies. |
| Business rates | “Continue to ease the burden of business rates for high street, leisure and hospitality businesses by increasing the multiplier on distribution warehouses.” | “In England…replace the business rates system [and]…raise the same revenue but in a fairer way.” | Abolish business rates and replace with a Commercial Landowner Levy. |
| State pension | Keep Triple Lock “…maintain all current pensioner benefits.” “Carefully” consider the Ombudsman WASPI women report and “work with Parliament to provide an appropriate and swift response”. |
Keep Triple Lock. | Keep Triple Lock. Ensure that women born in the 1950s are “finally treated fairly and properly compensated”. |
| Private pensions | ‘Pensions Tax Guarantee’ to: • Not introduce any new taxes on pensions; • Keep 25% tax-free lump sum; • Continue tax relief on pension contributions at the marginal rate; and • Not apply NICs to employer pension contributions. |
“…adopt reforms to workplace pensions to deliver better outcomes
for UK savers and
pensioners.” Consider what further steps are needed to improve security in retirement, as well as to increase productive investment in the UK economy.’ No comment on lifetime allowance or tax reliefs. |
Review rules concerning pensions so that those in the gig economy do not
lose out and portability between roles is protected. No comment on tax reliefs. |
SJP Approved 01/07/24
Documents*
Income tax
Capital Gains Tax
NICS
Inheritance Tax
Stamp duties
Corporation and business tax
Business rates
State pension
Private pensions
Source: Techlink
*For the Conservatives and Liberal Democrats, their programme costings are in a separate document, containing tax details that are not in the manifesto. Labour has incorporated a ‘Fiscal Plan’ section in its manifesto.
SJP Approved 01/07/24