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  • Writer's pictureAamer Amin

Election 2024- what main parties intend to do with tax?

In the lead-up to the next general election in the UK, the main political parties have outlined differing plans for taxation. Here's a summary of their key proposals:

1. Conservative Party

Key Policies:

  • Income Tax: Aim to reduce the basic rate of income tax from 20% to 19% over time. Proposals for a new “family tax allowance” to help with child care costs.

  • Corporation Tax: Plan to maintain a competitive rate to attract businesses, possibly keeping it around the current 25%.

  • National Insurance: No current proposals for major changes.

  • Green Taxes: Limited expansion, focusing more on technological solutions for climate change.

  • Inheritance Tax: Potential reforms to make it simpler, with some discussion around raising the threshold or reducing the rate.

2. Labour Party

Key Policies:

  • Income Tax: Increase the top rate of income tax back to 45% or even 50% for the highest earners (over £125,000). No increases for basic rate taxpayers.

  • Corporation Tax: Raise the rate to 26% to fund public services and infrastructure.

  • National Insurance: No major changes announced; however, possible increases for higher earners have been suggested.

  • Green Taxes: Significant expansion, including taxes on fossil fuels and incentives for green technology.

  • Wealth Taxes: Possible introduction of a wealth tax on assets over a certain threshold.

3. Liberal Democrats

Key Policies:

  • Income Tax: Increase the basic rate of income tax by 1p to fund health and social care.

  • Corporation Tax: Support a moderate increase but aim to balance it with incentives for smaller businesses.

  • National Insurance: Proposals to align it more closely with income tax to simplify the system.

  • Green Taxes: Strong focus on green taxes, including carbon taxes and incentives for renewable energy.

  • Wealth Taxes: Proposals for a one-off wealth tax on the very wealthy to address inequality.

4. Green Party

Key Policies:

  • Income Tax: Significant increase in the top rate of income tax and introduction of new tax bands for higher earners.

  • Corporation Tax: Raise corporation tax to fund environmental initiatives and public services.

  • National Insurance: Proposals to integrate National Insurance with income tax for a more progressive system.

  • Green Taxes: Expansion of green taxes including substantial carbon taxes, taxes on plastic, and incentives for zero-emission vehicles.

  • Wealth Taxes: Strong support for a wealth tax and higher taxes on property to reduce inequality.

5. Scottish National Party (SNP)

Key Policies (for Scotland):

  • Income Tax: Maintenance of the current progressive income tax system with a possible slight increase for higher earners.

  • Corporation Tax: Advocate for a lower corporation tax rate than the UK to attract businesses to Scotland.

  • National Insurance: Likely to support reforms to make it fairer for lower earners.

  • Green Taxes: Strong support for expanding green taxes and funding renewable energy projects.

  • Wealth Taxes: Support for progressive wealth taxes, including on property and land.

These proposals reflect each party's broader economic and social priorities, ranging from supporting public services and addressing inequality to stimulating business investment and tackling climate change. As election campaigns progress, specific details and additional measures may be announced, so it's advisable to follow updates from the parties for the latest information.

Disclaimer: E&OE

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