Taxes Under The New Government

We’re considering taxes under the new Government. Now that Labour have won the recent election, it is time to look at what this could mean for you and your taxes. Labour have committed to one major fiscal event a year in the hope that this will give businesses and individuals plenty of time to properly consider the new tax and spending polices they are introducing . Rachel Reeves, the new Chancellor of the Exchequer, is expected to deliver her first budget this Autumn.

With this in mind it is important to look into the Labour Manifesto and outline the main measures that are expected:

• VAT and business rates being applied to private schools. Due to fees of over £100m already reportedly being paid in advance, this is not likely to apply until the Spring term, in January 2025, at the earliest.
• The increase of stamp duty at 1% on the purchase of residential property by non-UK residents.
• The closing of non-dom tax loopholes.
• Private equity bosses to lose their “carried interest” loophole.
• To end the use of offshore trusts to avoid paying Inheritance Tax.

Labour have confirmed that no increases to VAT, National Insurance or Income Tax are expected however the same commitment was not made for Capital Gains Tax.

There is the intention to release a tax roadmap for business taxation within the next 6 months, enable business to be able to plan for the upcoming changes and to be able to invest with confidence. The manifesto also proposes that the upper Corporation Tax rate of 25% will not be increased for the next 5 years, with Capital Allowancing full expensing to be retained and a further commitment has also been made to keep the £1m annual investment allowance.

There is also the intention to replace the current business rate system to help reduce the stress on our high streets and enable them to compete with the larger online retailers.

Labour outlined another key area will be a crackdown on tax avoidance, with plans to recover £5bn of the tax gap from non-compliance and tax fraud. For Labour to be able to recover this they will need to heavily invest in HMRC.

Get In Touch

If you have any further questions regarding the possible impacts of the change in government, please contact your local Whitings LLP office.

Disclaimer - All information in this post was correct at time of writing.