UK and International Tax news

Conservative Party Manifesto and Tax

Wednesday 3rd July 2024

The UK Conservative Party Manifesto, launched on 11 June, proposes a Clear Plan, Bold Action, and a Secure Future.

The Conservative Party stresses in its manifesto it will always be the party of business with the private sector key to unlocking the investment, growth and opportunities of the future. At the heart of the Tories economic plan is a tax system that incentivises business to invest.

Tax measures pledged include

  • taking another 2p off employee NICs thereby halving from 12% at the beginning of the year to 6% by April 2027, making a total tax cut of £1,350 for the average worker on £35,000. The intention is to abolish employee NICs when financial conditions allow.
  • abolishing the main rate Class 4 of self-employed NICs, currently 6%, entirely by April 2029.
  • A new triple lock plus for pensioners, guaranteeing that both the state pension and a new age related personal allowance will increase at the higher of the rate of inflation, earnings, or 2.5%, so that new state pension will not be taxed.
  • giving working parents 30 hours of free childcare a week from when their child is nine months old to when they start school, saving eligible families an average of £6,900 per year.
  • increasing thresholds in child benefit (HICBC) by moving to a household system, so families do not start losing child benefit until their combined income reaches £120,000 per year, which should save the average family £1,500 a year. The full amount however will be clawed back once household income reaches £160,000 pa.
  • cutting the cost of net zero for consumers by guaranteeing no new green levies or charges while accelerating the rollout of renewables.
  • making permanent the increase to the threshold at which first-time buyers in England and Northern Ireland pay SDLT to £425,000 from £300,000; and
  • introducing a two-year temporary CGT relief for landlords who sell to their existing tenants.
  • reviewing the VAT threshold and explore options to smooth the cliff edge at £90,000.
  • a pledge not to raise the rates of income tax, capital gains, corporation tax or VAT.

The promised tax cuts will amount to about £17bn a year by 2029/30 which might be covered by cuts to the welfare budget and savings from further tax avoidance measures but other spending announced in the Manifesto have not been fully costed.

If you would like more information on the above, please contact Keith Rushen on 0207 486 2378.

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