Both the Conservative and Labour parties have committed not to increase income tax, national insurance, or VAT. However, Labour plans to introduce VAT on private school fees as part of their taxation strategy. Both parties also emphasize cracking down on tax avoidance and evasion to fund their respective spending plans. Additionally, they anticipate increased tax revenues by removing the remittance basis for non-Doms, although Labour intends to refine the Conservative approach to close existing loopholes.
One unique tax proposal from the Conservatives is to align the personal allowance for pensioners with the State Pension triple lock, ensuring that no State Pension income is subject to income tax. This move is aimed at appealing to older voters, despite the Conservatives previously abolishing the Age-related personal allowance.
Another notable Conservative manifesto promise is the permanent extension of Stamp Duty Land Tax (SDLT) relief for first-time buyers. Currently applicable for properties up to £425,000, this relief exempts buyers from SDLT, with a 5% rate thereafter. However, this relief is set to expire on 1 April 2025.
Included in the Conservative property section is a proposed two-year Capital Gains Tax (CGT) relief for landlords selling rental properties to tenants. This measure lacks specific details in the manifesto.
The Conservatives assert potential savings of £20 billion through efficiency improvements in the Civil Service. However, concerns have been raised about potential implications for HMRC staff levels and customer service quality.
Labour aims to close the “carried interest” tax loophole for general partners in the private equity and venture capital sector, anticipating £565 million in additional revenue. Currently, such returns are subject to Capital Gains Tax (CGT) rates of 18% or 28%, and Labour may consider aligning these rates with income tax or subjecting carried interest to income tax.
In Scotland, the SNP manifesto calls for full devolution of tax powers, including National Insurance, windfall taxation for companies, and enhanced measures against tax avoidance and evasion. They also advocate for VAT reform to address rating system imbalances, including ending VAT exemptions for private schools and introducing a lower VAT rate for the hospitality and tourism sectors.