The plans set out in the Green Party of England and Wales manifesto aim to transform the tax system to allow additional investment in public services. Proposals, which are also intended to simplify the tax system, include the creation of a single Consolidated Income Tax, which effectively incorporates employees national insurance contributions, capital gains tax, inheritance tax, tax on dividends and income tax. The introduction of an annual Land Value Tax, which charges landowners a proportion of the capital value of the land each year, is another significant proposal.
Key tax proposals include the introduction of a Carbon Tax, the abolition of council tax and business rates in exchange for an annual Land Value Tax, an increase in the rate of corporation tax to 24% and widening the definition of ‘profits’ for corporation tax purposes.
- Increase the rate of corporation tax to 24%.
- Widen the definition of ‘profits’ for corporation tax purposes to include dividends, share buyback, additions to cash holdings, payments to parent or subsidiary companies and other distributed income.
- Introduce a tax on meat and dairy products over the next ten years. The funds from this part of the Carbon Tax are to be used to help farmers transition to sustainable farming methods.
- End the double taxation of pensions funds, which are currently subject to corporation tax and then income tax when paid to pensioners.
- Increase employment allowance from £3,000 to £10,000.
- Advocate public country-by-country reporting and consolidated corporate tax across the EU to prevent profit shifting.
- Abolish council tax and business rates and replace them with a Land Value Tax, which charges the landowner a proportion of the capital value of the land each year (estimated to be around 1.4% of current values).
- Remove charitable status from private schools and charge full VAT on school fees.
- Increase the bank asset tax.
- Reduce VAT on: food and drink served in pubs, bars and restaurants; on hotel bookings; on theatre, music concert, museum and gallery tickets; and for the household repairs sector.
- Apply taxes to legalised drugs.
- Remove VAT from UK hotel and holiday homes stays and attractions.
- Apply a Carbon Tax on all fossil fuel imports, the domestic extraction of fossil fuels and the import of other energy, based on its embedded emissions. The rate of this tax will rise progressively over a decade. Non-fossil-fuel greenhouse gas emissions from industrial installations will also be subject to the Carbon Tax.
- End the VAT exemption for domestic flights and introduce an additional surcharge on domestic aviation fuel.
- Expand tax on plastic bags to cover plastic bottles, single-use plastics and microplastics.
- Introduce a frequent flyer levy on those who take more than one return flight a year.
Key tax proposals include the creation of a Consolidated Income Tax, which replaces a range of other taxes and the introduction of an annual Land Value Tax, which charges landowners a proportion of the capital value of the land each year.
- Create a single Consolidated Income Tax so that all income is treated the same way for tax purposes. The Consolidated Income Tax is to apply instead of employees national insurance, capital gains tax, inheritance tax, dividend tax and income tax.
- Abolish the rule that allows non-domiciled residents not to pay tax on foreign income.
- Introduce an annual Land Value Tax which replaces all land taxes including stamp duty land tax, inheritance tax on land, capital gains tax on land sales, annual tax on enveloped dwellings and income tax on land for owner-occupiers. The Land Value Tax charges the landowner a proportion of the capital value of the land each year (estimated to be around 1.4% of current values). It includes proposals to protect homeowning pensioners, and those who have low incomes but who are ‘land rich’, with a right to defer the tax until the property is sold or transferred. There will be legislation to prevent landowners from passing these tax costs back to renters and tenants. These changes are to be phased in over 10 years, with reliefs on offer.
- Reduction of tax-free drawdown on pensions to £40,000.
- Reduce tax relief on pension contributions to basic rate.
- Replace the nil rate income tax threshold and most income-related benefits with Universal Basic Income; an unconditional financial payment to everyone at a level above their subsistence needs.
General avoidance and evasion measures
- Advocate for the EU to prioritise the co-ordination of crackdowns on tax avoidance and evasion and campaign for the EU to clamp down on member state tax havens, including Ireland, the Netherlands and Luxembourg.
- Entrench the anti-avoidance principle in UK tax law and oblige banks to provide information about companies automatically to HMRC.
- Clamp down on tax havens internationally and, domestically, require offshore companies to reveal their beneficial ownership before being accepted as competitors for publicly funded contracts. In instances where beneficial ownership is not clear and/or payments are made to secretive tax havens, all money and assets transferred will be treated as an income distribution and taxed at the full corporate or income tax level.
- Establish HMRC as an independent agency of government, answerable to Parliament.
- End the sale of personal data, including tax records, for commercial or other ends.
- Close a loophole relating to stamp duty on shares by bringing the purchase of all shares and new share issues within the scope of the duty.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.