It’s Tuesday! Let’s talk Tax. Read this week’s short tax snippet for Doctors & Dentists, to help you save money and get more organised with your tax affairs. It’s just to give you a flavour – take 5 minutes to have a read.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice.
Election week
In the run up to the general election, the polls suggest that the gap is closing between the main parties.
If no clear majority is reached, this would then result in hung parliament, in which there will be some compromises and trade-offs on new tax legislation, with each party currently having different opinion.
Here we look broadly at the points from the main political parties relating to tax, in no particular order.
It is important to remember that these are taken as interpreted information from each party’s manifesto, and doesn’t necessarily mean they will come to fruition.
Income Tax
- Lib Dems – 1% rise in income tax rates to put towards an increased NHS and social care budget of £6billion
- SNP – increase the top rate of tax to 50%, currently 45%, with a threshold of £150,000
- SNP – also want to tax banker’s bonuses with a new tax
- UKIP – to increase the higher rate tax threshold to £55,000
- UKIP – to remove the tapering of the personal allowance for high earners earning over £100,000
- Tories – to increase the higher rate threshold to £50,000 by 2020
- Tories – to increase the personal allowance to £12,500 by 2020
- Labour – to introduce a new income tax band, for earnings above £80,000, however the tax rate has not been clearly specified
Corporation Tax (CT)
- Labour – want to return CT to 26% over the next 10 years, except small companies would benefit from a reduced 21% rate
- Green Party – increase CT to 28% for large companies
- Lib Dems – increase CT to 20% again
- SNP – don’t mention increases to CT but oppose further cuts
- Tories – reduce CT to 17% by 2020
- Plaid Cymru – would choose to set their own CT rate
National Insurance
- Green Party – remove upper cap on employees National Insurance
- Labour – would make no increases to NIC
- SNP – would also make no increases to employees NIC
- Tories – have plans for employer’s NIC holiday when recruiting ex-service personnel
Inheritance Tax
- UKIP – want to increase the IHT nil rate band to £500,000, which would virtually eliminate IHT amongst most households
- Lib Dems – want to revert the increase in the IHT threshold
- Labour – are of the same notion as Lib Dems, although it isn’t wholly clear
- Green Party – want to completely reform IHT so that the recipient’s wealth position is the key factor, rather the the estate value.
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