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BRANAGANS

Accountancy Services Ltd

01709 327 215 | info@branagans.co.uk

July 2024 | General Election - what key promises have been made?

The General Election is just days away, and each political party has released its manifesto to win our votes. Current polls suggest a landslide victory for Labour this year, with the Conservatives expected to lose a significant number of seats in Parliament. However, polls have been wrong before, so the true outcome will only be clear once all the votes are counted.

Each manifesto includes key policies that political parties believe will help them secure the votes they need to get them into Number 10, but there are a number of things that are not completely clear, such as whether Labour intends to raise Capital Gains Tax. There are various policies from each party that will resonate strongly with different people across the country, so let's take a look at the main ones from the three largest political parties.

WHAT THE PARTIES ARE PITCHING TO YOU - FIRST, LABOUR

Labour is planning a National Wealth Fund to invest in projects, such as clean energy, which it claims would create 650,000 jobs. It also plans to reform planning rules to build UK infrastructure, such as railways, roads and 1.5m houses it says the UK requires.

On the financial front, Labour has pledged not to raise taxes on "working people", so there are no plans to increase National Insurance Contributions (NICs), income tax or VAT. But it will extend the sunset clause of the Energy Profits Levy to provide a windfall tax on energy company profits, which have risen sharply as household bills escalate. It will also cap Corporation Tax at 25% for the whole of the next Parliament if it wins the election, unless tax changes in other countries affect the competitiveness of the UK.

One of Labour's key policies is to increase investment into the UK, something which has been relatively stagnant since 2016 when the UK voted to leave the EU. This is all part of its aim to create wealth for working people, but there is little detail on how this would be done other than by improving training and education, increasing the productivity of workers as a result.

The plan is for Labour to raise around £8.5 billion as a result of measures within its manifesto, including changing the non-domiciled status of wealthy people, charging VAT on private school fees, and cracking down on tax avoidance. It would also "end the use of offshore trusts" to avoid Inheritance Tax (IHT). This would help to prevent tax avoidance by large businesses or wealthy families who primarily use these types of trust.

AND THE CONSERVATIVES

The Conservative Party has also committed to not increase income tax, NICs and VAT, but it is going one step further and trying to appeal to the self-employed by offering a removal of their main rate of NICs by the end of the next Parliament. It had already removed the need to pay Class 2 NICs for this group of workers in April. In addition, a further 2p cut in NICs for employed workers is designed to tempt the rest of the workforce to vote Conservative.

For older people, there is the promise of a 'triple lock plus' which would raise the personal allowance for pensioners in line with the triple lock measures by creating a new age-related allowance. The way Child Benefit is calculated would also change, moving to a household assessment rather than tapering away at £120,000. There is also a plan to cut Stamp Duty Land Tax for first-time buyers by setting the threshold at £425,000, and the Conservatives have committed to not changing SDLT elsewhere. Capital Gains Tax (CGT) would also remain unchanged, with a two-year temporary relief for landlords who sell their property to existing tenants.

FINALLY, THE LIB DEMS

The Liberal Democrats - known more widely as the Lib Dems - would "fairly reform" CGT to close loopholes "exploited by the super wealthy". It also plans to introduce a 4% tax on the share buyback schemes of FTSE 100 companies.

The Lib Dem manifesto also pledges, to raise the Personal Allowance - the amount you can earn before you pay any tax - when the economic climate allows, although it did not state by how much. It would also increase the Digital Services Tax on social media and other tech giants from 2% to 6% and reverse the Conservative cuts in the Bank Surcharge and the Bank Levy, all of which would help fund its investment plans.

One measure which could prove popular is the pledge to turn water companies into public benefit companies by banning executive bonuses until sewage discharges and leaks end and creating a powerful new regulator to replace Ofwat with powers to prevent sewage dumps.

The polls are suggesting a landslide victory for Labour, with the Conservatives predicted to win the lowest number of seats in their history, and Rishi Sunak facing the prospect of being the first sitting Prime Minister in history to lose his seat at a General Election. But we will only know the result once all the votes have been counted, and the pollsters have had plenty of egg on their faces before. So, by July 5, we will know which party is going to be in government for the next Parliament.

CONTACT US

There are many variations in the manifesto plans of the main parties, but how many of these result in actual tax changes that will affect you and your business remains to be seen. So, if you want to plan ahead and prepare your own or your business finances no matter who is in power, then please get in touch with us on  01709 327 215 or via email at info@branagans.co.uk.

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