What Could the New Labour Government Mean for Tax?
Labour have promised not to increase Income Tax rates, National Insurance rates for individuals, Corporation Tax or the main rate of VAT. Amongst the things they have said they will implement are the following:
- Reforms to the UK tax regime for individuals who are non-UK domiciled
- Changes to the way that carried interest for private equity is taxed
- Measures to encourage the use of electric vehicles
- National Minimum Wage increases
- VAT on private school fees
- Changes to the Apprenticeship Levy
- Strengthened employment rights
It is likely that the next fiscal event, where Rachel Reeves the new Chancellor will formally announce Labour’s plans, will not take place until the Autumn. This is due to the fact that Labour have stated that they will have a full Office of Budget Responsibility report to support their budget proposals & this will take at least ten weeks to complete.
Potential announcements at this first fiscal event could see changes to Inheritance Tax & tax relief for pension contributions. Rachel Reeves has been quoted as saying that a flat rate of 33% tax relief for pension contributions would “be a welcome boost for basic rate tax-payers & a cut in the savings subsidy for higher earners.”
The Labour manifesto also promises a business tax road map within six months of being elected. This is expected to include proposals on business rates & incentives to boost investment in R&D.
Mitchells will keep you updated as changes are introduced & make sure you understand what they will mean for you. If you would like to speak to an expert give our team a call on 01246 274121 or email consult@mitchellsaccountants.co.uk