We look here at the Conservative Party's key tax pledges in their proposal to 'unleash Britain's potential'
Income Tax and National Insurance
The Conservative Party has promised not to raise the rates of income tax, National Insurance or VAT during the next government.
They have also promised to raise the National Insurance threshold to £9,500 next year, with an ultimate ambition of ensuring that the first £12,500 earnt is free of tax.
Employers who hire ex-Service personnel will pay reduced National Insurance contributions.
State Pensions and Pension Benefits
The "triple lock" on state pensions will remain in place for pensioners as will the winter fuel payment, older person's bus pass and other pensioner benefits.
Corporation Tax & Taxes on Businesses
Concerned about the decline in local high streets, the Conservative Party will hold a review of the business rates system and as a first step, they have promised to cut business rates for small retail businesses and for local music venues, pubs and cinemas.
Acknowledging the impact that entrepreneurs and start-ups have in tackling some of the challenges of our time, the Conservative Party has confirmed that they will increase the research and development tax credits to 13%. They will also review the definition of "research and development" at the same time to ensure that important investments in boosting productivity and innovation are incentivised.
The Conservative Party had initially planned to reduce the rate of Corporation tax to 17% next year, however in their manifesto they have confirmed that Corporation tax will remain at the rate of 19%.
Aimed at encouraging major multinational companies to pay a fair share of tax, a Digital Services Tax will be implemented.
Entrepreneurs' Relief ("ER")
ER is also mentioned in the manifesto, the Conservative Party has said it will review and reform ER as part of recognising that "some measures haven't fully delivered on their objectives".
Stamp Duty Surcharge
A stamp duty surcharge on non-UK resident buyers will be introduced. The surcharge will be levied at 3% and will apply to both companies and individuals.
In order to tackle plastic pollution, a new levy will be introduced to increase the proportion of recyclable plastics in packaging. The Conservative Party will also introduce a deposit scheme to incentivise people to recycle plastic and glass.
Anti-Avoidance and Evasion Law
Hoping to tackle tax evasion and reduce opportunities for aggressive tax avoidance, the Conservation Party will introduce a number of measures:
- Doubling the maximum prison term to 14 years for the most serious cases of tax fraud;
- Creating a single Anti-Tax Evasion unit at HMRC;
- Consolidating existing anti-evasion and avoidance measures and powers; and
- Introducing a new package of anti-evasion measures.
Generally speaking, the Conservative Party's manifesto was quite light on detail in relation to tax and their proposed changes. Although Corporation Tax will be frozen at the current rate, the manifesto contains tantalising hints that there could be other tax changes for businesses and entrepreneurs, with reviews to be held into ER and business rates and the introduction of a Digital Services Tax.
Click here to read the summary of the tax aspects of The Labour Party manifesto.
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