Summary of Tax Proposals 7 Dec 2019
It can often be very difficult to find out what the actual tax and business policies of the main parties are. We have produced a summary showing the main proposals of the Conservatives, Labour and Lib Dems.
• A pledge to not increase the rates on income tax, National Insurance Contributions or VAT (although the manifesto is silent on other taxes, such as Capital Gains Tax)
• Increase in National Insurance threshold to £9,500 (currently £8,632), with a pledge to increase this to £12,500 to be in line with income tax
• Increase in Employment Allowance (i.e. the reduction to an employer’s Class 1 Secondary National Insurance Contribution bill) from £3,000 to £4,000
• Increase in structures and buildings allowance (introduced on 29 October 2018) from 2% to 3%
• Increase in R&D tax credits from 12% to 13%
• Introducing Stamp Duty Land Tax surcharge of 3% for non-residents buying UK residential property
• Entrepreneurs’ Relief to be reviewed and reformed
• Digital Services Tax to be implemented.
• Introducing a 45% tax rate for individuals earning over £80,000, and 50% tax band for those earning over
• Capital gains to be taxed at income tax rates (i.e. 20%, 40%, 45% or 50% depending on other income), instead of the current rates of 10% or 20% (or 18%/28% for gains on residential property and carried interest)
• Removal of dividend tax rates (currently 7.5%, 32.5% and 38.1%) to bring the taxation of dividends in line with other income
• Removal of capital gains tax annual allowance (although introducing an inflationary allowance and a ‘de minimis’ allowance of £1,000)
• Abolishing Entrepreneurs’ Relief
• Reversing ‘cuts to inheritance tax’, which is likely to be the removal of the £125,000 residence nil rate band
• Increasing corporation tax to 26% (main rate) and 21% (small profits rate) by the 2022/23 tax year
• Abolishing R&D tax credits for large corporations and Patent Box
• Introducing a council tax levy of 200% on second homes used as holiday homes
• Introducing 20% VAT on private school fees
• Introducing a 0.5% Stamp Duty levy on foreign currency transactions exceeding £1,000
• Retaining Principal Private Residence relief.
• Increase in corporation tax to 20%
• Increase in income tax rates by 1% (to 21%, 41% and 46%)
• Removal of capital gains tax annual allowance
• Increase in Digital Services Tax from 2% to 6%
• Increasing council tax on second homes by up to 500%
• Introduce Stamp Duty Land Tax surcharge on overseas residents purchasing second homes
• Expand scope of R&D tax credit to be allowed on more items of expenditure
• Expand Apprenticeship Levy.