A snap General Election is starting in a few days and ending at polling stations on December 12th.
We've added a small guide to the 2019 General Election down below, but avoiding the elephant in the room, which has been the main focus over the last three years, we will concentrate on what the top political parties have planned for tax and any policies that have a direct effect on your pocket.
Based on the outcome from the last General Election, the top parties, as usual, are the Conservatives, Labour Party and Liberal Democrats, so we will focus on their policies here. Policy updates will be made as the election pledges are made and manifestos updated.
Last updated: 24/11/19
- Pledge to not raise VAT, NI contributions or income tax.
- Conservatives previously rumoured to raise higher income tax band cut-in from £50,000 of gross income to £80,000, however this is not shown in their 2019 manifesto.
- Raise the kick-in point for National Insurance to £9,500 from next April.
- Conservatives to retain current corporation tax rate of 19 percent (recently announced move differs from previously announced cut to 17 percent).
- Conservatives to increase free childcare for children during school term time to cover 48 weeks per year.
- Remove policy allowing people to claim child benefit for dependents overseas post-Brexit.
- Labour to bring create a 45 percent tax band at £80,000 of gross income and lower the top rate tax band cut-in to £125,000 and increase its rate to 50 percent. So, the rates would look like £0 to £50,000 at 20 percent, £50,001 to £80,000 at 40 percent, £80,001 to £125,000 at 45 percent, and £125,001 upward at 50 percent.
- Dividends to be taxed under the marginal tax band system with income tax, subject to a minimum allowance of £1,000. The bands and rates would be the same as income above. So, 20,40,45 and 50 percent.
- Capital gains to be taxed under the marginal tax band system with income tax, subject to a minimum allowance of £1,000. The bands and rates would be the same as income above. So, 20,40,45 and 50 percent.
- Labour to re-introduce the lower rate band for corporation tax for small profits (under £300k p.a.), whilst increasing the main rate of corporation tax to 26 percent (up from the current 19 percent). By 2022, the small profits rate will be 21 percent and the top rate will be 26 percent. From next year, they will be 19 and 21 percent respectively.
- Labour to scrap making tax digital quarterly reporting requirements for firms with turnover below £85,000.
- Labour to create a NES, National Education Service, to provide free lifelong learning.
- Labour to end funding cuts from youth services and youth centres.
- Labour to boost capital funding for the NHS.
- Labour to scrap university tuition fees.
- Labour to introduce a universal free childcare scheme.
- Labour to scrap zero-hours contracts.
- Labour to complete HS2 (High Speed Rail line) from London to Birmingham and Leeds and Manchester, to Scotland. Crossrail 2 for the South-East to also be built.
- Labour to increase the minimum wage to £10 per hour, including under-18's. The current minimum wage for people over 25 is £8.21, £6.15 for 18-20 year olds, and £4.35 for people under 18. A new maximum wage is also planned.
- Labour to introduce grants or interest-free loans for home modernisation in order to reduce energy costs. This provision would also create over 400,000 jobs.
- Labour to cancel the roll out of Universal Credit.
- Labour to create a financial transactions tax for City firms.
- Labour to tightly regulate betting terminals.
- New tax on second homes.
- £1 billion annual levy on oligarchs.
- New levy on tax havens.
- New digital services tax on tech giants.
- £5 billion 'Robin Hood Tax' on City firms
- Scrapping of non-dom residential status
- Reverse changes made to capital gains taxes (currently non-residential gains are taxed 8 percent lower).
- 20 percent tax on private health insurance.
- Fat Cat levy on salaries over £350,000.
- review of corporate tax reliefs
- income from wealth to be taxed the same as income from work
- guaranteed zero increases to VAT
- biggest ever crackdown on tax avoidance and evasion
- prevent auto-enrolment into 'rip-off' pension schemes
Liberal Democrat Policies
- In their 2019 manifesto, the Liberal Democrats plan to raise income tax in every band by one percent, so 21 percent, 41 percent and 46 percent.
- A similar policy to income tax for dividend taxes likely, so raise income tax in every band by one percent, so 8.5% percent, 33.5% percent and 39.1% percent.
- Remove capital gains annual exempt allowance completely.
- Scrap the Marriage Tax Allowance (This allowed couples to transfer up to ten percent of their tax-free allowance to their partner).
- Liberal Democrats to aim to equalise the thresholds for income tax and national insurance. The primary threshold for NICs and the tax-free allowance for income tax would be at parity, without losing any access to pension or benefits.
- Liberal Democrats to end one percent cap on public sector pay rises.
- Liberal Democrats to increase corporation tax to 20 percent (disclosed in plans to fund life long skills 'wallet').
- Liberal Democrats to reform capital gains and dividend tax reliefs.
- Liberal Democrats to create a 'start up allowance' to help new business owners with living costs during the start up of a business.
- Liberal Democrats to review small firms business rates.
- Liberal Democrats to abolish zero hour contracts.
What is the General Election?
On December 12th the UK population will head to the polls to cast their vote on the snap General Election. An election called over two years ahead of schedule and two years since the last election. After PM Boris Johnson's failure to leave the European Union on October 31st, he motioned an election as a way to break the political deadlock. It took him three attempts to get the election approved by parliament.
Johnson's Conservatives have 297 MPs whereas other parties combined have 341 MPs, the largest opposition coming from the Labour Party with 243 MPs, followed by the Liberal Democrats with 19.
Johnson hopes taking the UK to the polls will give him a majority government - an action his predecessor, Theresa May, also took. That ended with disastrous results, with her snap election losing the Conservatives their majority and having to form a coalition to govern.
So, what happens next?
The actual election process will begin in a few days, on November 6th, 25 days before the December 12th polling date. With results being announced in the early hours of December 13th.
But, what happens with Europe?
The top issue the population will be using as a deciding factor, according to many polls, appears to be leaving the European Union. The Conservatives want to push through the deal that Johnson recently renegotiated, and if they win the General Election with a majority, they hope to push that through and leave. The DUP, with whom the Conservatives currently have a coalition, do not like Johnson's deal.
The Labour Party will negotiate a deal of their own and put it before the public, with a new vote with choices to accept that deal, with full disclosure of the terms and effects, or opt to remain.
The SNP would have another referendum on leaving Europe.
The Liberal Democrats would u-turn on Brexit and cancel it altogether.