Labourparty proposals on tax had mostly been pre-announced, with commitments not to raise NICs or the basic, higher or additional rates of income tax or VAT. On corporation tax, Labour pledges to cap the main rate at 25% for the entire parliament and to ‘act if tax changes in other countries pose a risk to UK competitiveness’.
The commitment on VAT is separate to the party’s flagship policy of removing private schools from the scope of the VAT exemption for supplies of education. Business rates relief for private schools would also be removed.
On business taxes, permanent full expensing would be retained, with greater clarity provided on what qualifies for allowances. The oil and gas energy profits levy would be extended until the end of the next parliament, and the rate increased by three percentage points, accompanied by the removal of investment allowances. The business rates system would be replaced to ‘level the playing field between the high street and online giants’.
Non-dom status would be abolished ‘once and for all’, replacing it with a scheme for those who are ‘genuinely in the country for a short period’. The party would also ‘end the use of offshore trusts to avoid IHT’.
The party would treat carried interest as income rather than capital, for tax purposes.
The SDLT non-resident surcharge would be increased by one percentage point.
On the administration of taxes, Labour would ‘modernise HMRC’ and introduce changes to further tackle tax avoidance. There would be a ‘renewed focus on tax avoidance by large businesses and the wealthy’. The costings section suggests an extra £855m investment in HMRC to reduce tax avoidance – partly funded by the extra revenue that that investment would bring in.
There would be ‘one major fiscal event a year’, with ‘due warning’ of tax and spending changes. As previously announced, the party would publish a roadmap for business taxation to allow businesses to ‘plan investments with confidence’.
Green
The GreenParty commits not to increase the basic rate of income tax ‘during this cost of living crisis’ and to align CGT rates with income tax rates. Environmental measures feature prominently, with an increased oil and gas levy, and a new carbon tax on all fossil fuels with the amount of tax proportional to the greenhouse gases produced, and increased progressively over ten years.
A new annual wealth tax would be introduced and, on income tax and NICs generally the party would align rates so that all income is taxed at the same rates regardless of its source. The NICs upper earnings limit would be removed and pensions tax relief would be limited to basic rate.
IHT would be reformed. In the longer term a land value tax would be introduced, and in the meantime council tax bands would be revalued and various business rates reliefs removed.
VAT would be reduced in certain sectors (e.g. hospitality and the arts) and increased in others (e.g. private education and financial services).
Extra funding would be given to HMRC to reduce the tax gap.
Plaid Cymru
Plaid Cymruwill campaign for the Senedd to have greater control over tax in Wales, including powers to set income tax bands and thresholds (as applies in Scotland). Plaid would increase the oil and gas levy, align CGT rates with income tax, consider increasing the additional rate of NICs and introducing a wealth tax, and charge VAT on private school fees.
Plaid would also increase the income tax personal allowance for pensioners in line with the pensions triple lock. One proposal which is particularly pertinent in Wales is the consideration of alternative methods for calculating entitlement to universal credit (rather than the standard monthly basis) to support the farming community.
Scottish National Party
The Scottish National Party is also asking for full devolution of tax powers, including NICs (which would allow the Scottish government to better tailor NICs rates with its income tax bands and rates).
The SNP would look at expanding the energy sector windfall tax to target ‘excessive profits’ across the wider economy, rather than focusing on the oil and gas sector which particularly affects operations in Scotland.
The party’s proposals on VAT would include reform of classifications, noting that ‘it is wrong that suncream is subject to VAT, but caviar is not’ and remove private schools from exemption. A ‘lower rate’ of VAT would be introduced for the hospitality and tourism sectors. The SNP would also ‘refund the £175m in VAT owed to Scotland’s emergency services’.
Labourparty proposals on tax had mostly been pre-announced, with commitments not to raise NICs or the basic, higher or additional rates of income tax or VAT. On corporation tax, Labour pledges to cap the main rate at 25% for the entire parliament and to ‘act if tax changes in other countries pose a risk to UK competitiveness’.
The commitment on VAT is separate to the party’s flagship policy of removing private schools from the scope of the VAT exemption for supplies of education. Business rates relief for private schools would also be removed.
On business taxes, permanent full expensing would be retained, with greater clarity provided on what qualifies for allowances. The oil and gas energy profits levy would be extended until the end of the next parliament, and the rate increased by three percentage points, accompanied by the removal of investment allowances. The business rates system would be replaced to ‘level the playing field between the high street and online giants’.
Non-dom status would be abolished ‘once and for all’, replacing it with a scheme for those who are ‘genuinely in the country for a short period’. The party would also ‘end the use of offshore trusts to avoid IHT’.
The party would treat carried interest as income rather than capital, for tax purposes.
The SDLT non-resident surcharge would be increased by one percentage point.
On the administration of taxes, Labour would ‘modernise HMRC’ and introduce changes to further tackle tax avoidance. There would be a ‘renewed focus on tax avoidance by large businesses and the wealthy’. The costings section suggests an extra £855m investment in HMRC to reduce tax avoidance – partly funded by the extra revenue that that investment would bring in.
There would be ‘one major fiscal event a year’, with ‘due warning’ of tax and spending changes. As previously announced, the party would publish a roadmap for business taxation to allow businesses to ‘plan investments with confidence’.
Green
The GreenParty commits not to increase the basic rate of income tax ‘during this cost of living crisis’ and to align CGT rates with income tax rates. Environmental measures feature prominently, with an increased oil and gas levy, and a new carbon tax on all fossil fuels with the amount of tax proportional to the greenhouse gases produced, and increased progressively over ten years.
A new annual wealth tax would be introduced and, on income tax and NICs generally the party would align rates so that all income is taxed at the same rates regardless of its source. The NICs upper earnings limit would be removed and pensions tax relief would be limited to basic rate.
IHT would be reformed. In the longer term a land value tax would be introduced, and in the meantime council tax bands would be revalued and various business rates reliefs removed.
VAT would be reduced in certain sectors (e.g. hospitality and the arts) and increased in others (e.g. private education and financial services).
Extra funding would be given to HMRC to reduce the tax gap.
Plaid Cymru
Plaid Cymruwill campaign for the Senedd to have greater control over tax in Wales, including powers to set income tax bands and thresholds (as applies in Scotland). Plaid would increase the oil and gas levy, align CGT rates with income tax, consider increasing the additional rate of NICs and introducing a wealth tax, and charge VAT on private school fees.
Plaid would also increase the income tax personal allowance for pensioners in line with the pensions triple lock. One proposal which is particularly pertinent in Wales is the consideration of alternative methods for calculating entitlement to universal credit (rather than the standard monthly basis) to support the farming community.
Scottish National Party
The Scottish National Party is also asking for full devolution of tax powers, including NICs (which would allow the Scottish government to better tailor NICs rates with its income tax bands and rates).
The SNP would look at expanding the energy sector windfall tax to target ‘excessive profits’ across the wider economy, rather than focusing on the oil and gas sector which particularly affects operations in Scotland.
The party’s proposals on VAT would include reform of classifications, noting that ‘it is wrong that suncream is subject to VAT, but caviar is not’ and remove private schools from exemption. A ‘lower rate’ of VAT would be introduced for the hospitality and tourism sectors. The SNP would also ‘refund the £175m in VAT owed to Scotland’s emergency services’.
