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General election 2024: key tax policies

Author: ICAEW Insights

Published: 18 Jun 2024

Updated on 20 June 2024 to include SNP manifesto

This article was updated on 20 June 2024 to include a summary of the Scottish National Party’s manifesto which was published on 19 June 2024.

ICAEW’s Tax Faculty provides a summary of the key tax policies from the main parties’ general election 2024 manifestos.

The Conservative Party 

The Conservative Party has pledged to: 

  • reduce the headline rate of employees’ class 1 national insurance contributions (NIC) from 8% to 7% from April 2025, and to 6% from April 2027;
  • reduce the main rate of class 4 NIC (currently 6%) paid by the self-employed by 1 percentage point each year from April 2025, and abolish it entirely in April 2029;   
  • introduce a new age-related income tax personal allowance from April 2025 (part of the ‘triple lock plus’). The allowance would rise by the highest of prices, earnings or 2.5% each year, ensuring that it exceeds the amount of the new state pension;
  • reform the high income child benefit charge (HICBC) so that the focus is on household income, not the individual’s income. From April 2026, it proposes that the HICBC will begin to claw back child benefit where household income exceeds £120,000. The full amount would be clawed back where household income is £160,000 or more;
  • make permanent the increase to the threshold at which first-time buyers in England and Northern Ireland pay stamp duty land tax (SDLT) to £425,000 from £300,000; and
  • introduce a two-year temporary capital gains tax (CGT) relief for landlords who sell to their existing tenants. 
  • This package of tax cuts would be funded in part by tackling tax avoidance and evasion. This is expected to bring in additional tax receipts of £20bn over five years.  

The Conservative Party has identified a number of areas where it would not take action. For example, the ‘pensions tax guarantee’ commits the party to maintaining many aspects of the current income tax regime for pensions, and the ‘family home tax guarantee’ does the same for CGT and residential property. The party has pledged not to raise the rates of a number of taxes, including income tax and corporation tax.   

The Conservative Party’s ten-point plan to support small and medium-sized enterprises includes commitments to keep the VAT threshold under review and to retain key tax incentives (eg, business asset disposal relief). Elsewhere there is a commitment to maintain research and development tax reliefs.  

Further information 

The Green Party 

The Green Party proposes to make a range of personal tax changes estimated to increase tax receipts by between £50bn and £70bn per year. These include the introduction of a wealth tax applying where assets exceed £10m and reforming inheritance tax (IHT) to close ‘loopholes used by the super-rich’. Measures which are broader in scope include aligning rates of CGT with income tax, applying the standard rate of employees’ class 1 NIC (currently 8%) to earnings above £50,270 (currently 2%), and fixing the rate of income tax relief for pension contributions at 20%.  

The Green Party has committed to not increasing corporation tax, although it would consider introducing windfall taxes. Its plans include encouraging businesses to decarbonise, in part by levying a carbon tax expected to raise up to an additional £80bn by the end of the parliament. 

Further information 

The Labour Party 

The Labour Party has pledged to reduce tax avoidance and further close the tax gap. The party pledges to invest £855m to modernise HMRC with the expectation of bringing in additional tax receipts of £5.2bn (figures for 2028/29). This includes revenue from ‘closing further non-dom tax loopholes’. Measures set out in the manifesto include: increasing registration and reporting requirements; strengthening HMRC’s powers; investing in new technology; building capacity within HMRC; and a renewed focus on tax avoidance by large businesses and the wealthy. 

Other tax-raising proposals include: 

  • charging VAT on private school fees;
  • taxing carried interest as income;
  • increasing the rate of SDLT on purchases of residential property in England and Northern Ireland by non-UK residents by 1 percentage point; and
  • closing ‘loopholes’ in the windfall tax on oil and gas companies. 

The Labour Party has committed to not increasing NIC, rates of income tax or VAT.  

On business tax, the party has promised to act in a way that ‘gives certainty and allows long-term planning’. It has committed to one major fiscal event a year and to publish a roadmap for business taxation for the next parliament. It pledges to cap corporation tax at the current rate of 25% per cent and retain key capital allowances, including full expensing and the annual investment allowance. It also commits to providing greater clarity on what qualifies for allowances to improve business investment decisions. 

Further information 

The Liberal Democrats 

The Liberal Democrats’ ‘fair deal’ is funded by ten tax policies which it expects will bring in revenue of £26.9bn in 2028-29.  Many apply to big businesses, including banks, where bank surcharge and bank levy revenues would be returned to 2016 levels in real terms. For a variety of reasons, including environmental concerns, there are new or increased taxes affecting a range of industries. These include the digital services sector, water companies, the oil and gas industry and the aviation industry.  

It proposes to reform CGT. Tax-cutting measures include increasing the CGT annual exempt amount from £3,000 to £5,000 and introducing a new tax-free allowance for inflation and a new relief for small businesses. However, overall CGT reform is expected to raise £5.2bn as the Liberal Democrats look to ‘close loopholes exploited by the super-wealthy’. The largest single revenue-raising measure is closing the tax gap. £1bn would be given to HMRC to improve its services and to target evasion and anti-avoidance with a view to generating additional tax receipts of £7.2bn. 

A number of changes are planned for employers, employees and freelancers. The Liberal Democrats undertake to review the off-payroll working IR35 reforms and employment rights, including establishing a new ‘dependent contractor’ employment status. A number of changes are planned for the national minimum wage, including increasing the amounts paid to care workers. Statutory sick pay would be reformed and parental leave and pay would be expanded. 

Further information 

Plaid Cymru 

Plaid Cymru wants the Senedd to have powers to set income tax bands and thresholds in Wales. At the UK level, the party would:  

  • increase the windfall tax on oil and gas companies; 
  • equalise rates of CGT with income tax;
  • introduce a wealth tax;
  • charge VAT on private school fees; and
  • crack down on tax evasion and avoidance, including ‘abolishing loopholes for non-doms’. 

It is interested in increasing rates of NIC for high earners. Plaid Cymru would increase the income tax personal allowance for pensioners.

Further information

The Reform Party

The Reform Party has pledged to cut taxes and make tax simpler. The main beneficiaries are individuals with the headline announcement being increases in the income tax personal allowance (to £20,000) and the threshold for paying income tax at 40% (to £70,000). Other key proposals include:

  • abolishing IHT on estates under £2m;
  • significant cuts to SDLT; and
  • scrapping VAT on household energy bills. 

For businesses, the main rate of corporation tax would be reduced from 25% to 20%, and then to 15%. The threshold for registering for VAT, currently £90,000, would increase to £150,000 to ‘free up small entrepreneurs from red tape’. The rate of employers’ NIC would be increased from 13.8% to 20% for foreign workers, subject to some exceptions. 

Further information

The Scottish National Party (SNP)

The SNP wants ‘full devolution of tax powers’. This includes the devolution of NIC, which would enable the SNP to ensure NIC rates and thresholds fit with income tax in Scotland. The SNP would reform VAT to address ‘imbalances’, giving the example of sunscreen which is subject to VAT and caviar which is not. Other VAT policies include introducing a lower rate of VAT for the hospitality and tourism sectors and removing VAT from on-street electric vehicle charging. 

Further information 

The Tax Faculty

ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

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