General election 2024: At a glance from Saffery

Ahead of the general election on 4 July, Saffery, the accounting and business advisory firm in the Thames Valley, provides a summary of the tax pledges made by the Conservative and Unionist Party, the Labour Party and the Liberal Democrats, in their manifestos and other official documents.

Conservatives

Business

• No increase in corporation tax.
• Look to extend ‘full expensing’ of capital expenditure for companies investing in qualifying plant and machinery to leasing, when “fiscal conditions allow”.
• Keep the VAT threshold under review and explore options to smooth the cliff edge at £90,000.
• Retain Enterprise Investment Scheme, Seed Enterprise Investment Scheme, Venture Capital Trusts, Business Asset Disposal Relief, Agricultural Property Relief and Business Relief (previously known as business property relief).
• Maintain research and development (R&D) tax reliefs.
• Keep the energy profits levy (windfall tax) on oil and gas companies until 2028-29, unless prices fall back sooner.
• Maintain the investment allowances for investing in the North Sea.
• Extend the opportunity for having more freeports with an application round in the next Parliament.
• Ensure “creative sector tax incentives remain competitive”.
• Over time increase the business rates multiplier on distribution warehouses that support online shopping.

Property

• Make permanent the temporary Stamp Duty Land Tax (SDLT) threshold for first-time buyers of £425,000.
• No increase to the rate or level of SDLT.
• Maintain CGT Private Residence Relief.
• Introduce a two-year temporary CGT relief for landlords who sell to their existing tenants.

Individuals

• No increase in the rate of income tax or VAT.
• No increase in capital gains tax (CGT).
• Reduce the main rate of Class 1 employee National Insurance from 8% to 6% by April 2027.
• Abolish the main rate of Class 4 self-employed National Insurance by the end of the Parliament.
• A long term ambition to abolish National Insurance.
• Introduce the ‘Triple Lock Plus’, whereby as well as the State Pension rising with the higher of inflation, earnings or 2.5%, from April 2025 there will be an age-related personal allowance also rising by the higher of inflation, earnings or 2.5%.
• Assess the high income child benefit charge (HICBC) on household income, with the threshold for the charge changed from £60,000 for the highest earning individual to £120,000 of combined income, with families no longer receiving Child Benefit if their household income is above £160,000.
• Maintain the 25% tax free lump sum on pensions.
• Tax relief on pension contributions to continue to be at marginal rate.
• No extension of National Insurance contributions to employer pension contributions.

Other

• Tackle tax avoidance and evasion.
• Complete the review of Gift Aid within the next Parliament.

The Conservatives made several announcements in the 2024 Spring Budget, which have not yet been legislated. These include significant reforms to the non-dom tax regime and the abolition of the furnished holiday lettings regime, both of which are due to be effective from April 2025.

Labour

Business

• Publish a roadmap for business tax for the next Parliament.
• Cap corporation tax at 25% for the next Parliament.
• Retain a permanent full expensing system for capital investment and the annual investment allowance for small business.
• Extend the energy profits levy (windfall tax) paid by oil and gas companies until the end of the next Parliament, as well as increasing the rate of the levy by three percentage points and removing the oil and gas company investment allowances.
• Support implementation of the OECD global minimum rate of corporate tax and back international efforts to make sure multinational tech companies pay their “fair share” of tax.
• End business rates relief for private schools.
• Replace the business rates system in England, with a system which will raise the same revenue but in a “fairer way”.
• Replace the Apprenticeship Levy with a Growth and Skills Levy.

Property

• Raise the SDLT surcharge for non-UK residents buying residential property in England and Northern Ireland by 1%.

Individuals

• No increase in the basic, higher, or additional rates of income tax.
• No increase in National Insurance or VAT.
• Retain the triple lock so that pensions always rise in line with the higher of inflation, wages or 2.5%.
• Abolish non-dom status, replacing it with a scheme for people in the country for a “short period”.
• End “the use of offshore trusts to avoid inheritance tax”.
• End the VAT exemption for private schools.
• Charge private equity managers to income tax on carried interest instead of capital gains tax.

Other

• A commitment to one major fiscal event a year.
• Modernise HMRC and change the law to tackle tax avoidance.
• Increase registration and reporting requirements.
• Strengthen HMRC’s powers, and focus on tax avoidance by “large businesses and the wealthy.”

Liberal Democrats

Business

• Restore bank surcharge and bank levy revenues to 2016 levels in real terms.
• Increase the headline rate of energy profits levy (windfall tax) paid by oil and gas companies, extend it to profits since October 2021 and remove the investment allowance.
• Increase the Digital Services Tax from 2% to 6%.
• Introduce a 4% tax on the share buyback schemes of FTSE-100 listed companies.
• Extend the soft drinks levy to juice-based and milk-based drinks that are high in added sugar.
• Introduce a 16% sewage tax on water company profits.
• Replace business rates with a commercial landowner levy.
• Work with partners in international forums, including the OECD and the UN, to tackle international corporate tax avoidance and make the case for increasing the global minimum rate of corporation tax to 21%.
• Devolve Air Passenger Duty in Wales.
• Replace the apprenticeship levy with a broader and more flexible skills and training levy.

Property

• Allow local authorities to increase council tax by up to 500% where homes are being bought as second homes, with a stamp duty surcharge on overseas residents purchasing such properties.

Individuals

• No increase in income tax, National Insurance contributions or VAT.
• Priority for tax cuts, “when the public finances allow”, will be to cut income tax by raising the tax-free personal allowance.
• Reform capital gains tax by: having three rates; increasing the annual exemption from £3,000 to £5,000; and introducing a tax-free “inflation allowance” and a targeted relief for small businesses. • End retroactive tax changes such as the loan charge.
• Review the off-payroll working IR35 reforms.
• Protect the triple lock so that pensions always rise in line with the higher of inflation, wages or 2.5%.
• Cut VAT on public charging of electric vehicles to 5%.
• Abolish VAT on children’s toothbrushes and toothpaste.
• Reform the tax on international flights to focus on those who fly the most, while reducing costs for those who take one or two international return flights per year.
• Introduce a new “super tax on private jet flights” and seek to apply standard-rate VAT to private, first-class and business-class flights.

Other

• Tackle tax avoidance and evasion by investing in HMRC to improve taxpayer support and boost compliance and anti-avoidance activities.

If you want to know more about how any of these prospective changes will affect you or your business please speak to Saffery Partner, Sheryl Davis at 01494 464666 or email Sheryl.davis@saffery.com.