Posted by admin - April 29, 2015 9:20 am General Election 2015: How Each Party Compares On Taxation

Taxation will be one of the key battlegrounds in the run up to polling day. We compare how the main political parties stand on taxation ahead of the upcoming General Election.

Conservatives

George Osborne has promised that the basic personal allowance would be raised to £12,500 by 2020. That would mean that most people on the minimum wage would pay no income tax. The increase in the allowance to £10,600 for the current tax year took 3 million people out of paying tax.

The Chancellor has also announced that a future Conservative government will increase the amount at which the 40% higher rate of tax is paid to £50,000. It is claimed that the Liberal Democrats blocked him from doing it before the election.

The party has also promised that inheritance tax will not be paid on estates worth less than £1 million and there will be no increases in VAT or National Insurance.

The Conservatives propose to cut pensions tax relief for those with an income above £150,000.

Labour

Like the Conservatives, Labour has said there will be no increase in VAT or National Insurance, and they would like to raise the amount at which taxpayers begin to pay the 40p higher rate of tax. However, the party has also pledged to bring back the 50p top rate of income tax for people earning more than £150,000, while reintroducing the 10p lower starting rate which was scrapped by the last Labour government. Marriage tax allowance will be scrapped.

The party has refused to rule out an increase in Corporation Tax. Critics suggest that this could be as much as 6%. As a result, Labour has been accused of being ‘anti-business’.

The Labour Party also wants to introduce a new tax on homes worth more than £2 million.

Ed Miliband has announced that Labour would scrap the non-dom tax status enjoyed by those who are British citizens but do not pay tax on earnings made outside the UK. Mr Miliband claims that their special status has been abused and that all of those calling the UK their home should pay full British tax on all of their income.

A future labour government would seek to cap rent increases in the private sector.

Labour like the Conservatives propose to cut the tax relief on pension contributions for those with an income above £150,000.

Liberal Democrats

The Liberal Democrats are committed to increasing the personal allowance to £12,500, and promise that this will happen within a year of coming to power. They would like to align National Insurance with Income Tax and there would be no increase in the headline rates of Income Tax, National Insurance, VAT or Corporation Tax.

They also, like Labour, propose a mansion tax. However, theirs would involve the introduction of council tax bands meaning homeowners would pay more for larger properties.

The party plans to claw back £6 billion from tax evaders and would introduce a new Corporation Tax on banks.

UKIP

UKIP says it believes in lower taxes. Those working for the minimum wage wouldn’t pay any tax under a UKIP government, and Inheritance Tax would be abolished by them on the grounds that they believe that the super-rich seek to avoid it.

At their 2014 annual conference, the party announced plans to cut income tax from 40p to 30p for earnings between £43,500 and £55,000, while raising the tax free band to £13,000.

Green Party

The Green Party would introduce a ‘wealth tax’ of 2% on those with assets of more than £3 million. The party claims that this would bring in an additional £40 billion.

Income tax in general would be raised under their leadership. The top rate of tax would be raised to 60%. They also propose to remove the upper limit on National Insurance so it rises from 2% to 12% of all income above £42,380. They would also increase Corporation tax from 20% to 30%.

Taxes on alcohol and tobacco would be hiked up and VAT replaced with green taxes, which would increase on products considered non-environmentally friendly.

Scottish National Party (SNP)

There are fears that the SNP will use a swathe of new tax powers to target high earners. The SNP support the reintroduction of the 50p top rate of income tax, and are investigating ways to replace the council tax with a new levy.

From April 1, a new property tax, known as Land and Buildings Transaction Tax, will replace Stamp Duty in Scotland. Buyers will pay 10% of the purchase price above £325,000 and 12% above £750,000. Anyone purchasing a home for £333,000 or above would be worse off.

The SNP will maintain universal benefits such as free prescriptions and concessionary bus passes for Scottish residents.