The Liberal Democrats manifesto has a focus on support for start-up businesses and innovation. There are increases proposed to both the corporation tax rate and income tax rates and a Commercial Landowner Levy to replace business rates in England. Ending retrospective tax changes, such as the loan charge, is also significant.
Key tax proposals include restoring the corporation tax rate to 20%, focusing on simplifying business tax and various measures to promote innovation and support new business. Replacing business rates in England with a Commercial Landowner Levy based on the land value of commercial sites is also a significant proposal.
- Restore the corporation tax rate to 20% and keep the rate stable.
- Simplify business taxation to reduce administration costs and opportunities for tax avoidance.
- Refund colleges for the VAT they pay.
- Support the growth of the tech sector by allowing companies to claim R&D tax credits against the cost of purchasing datasets and cloud computing.
- Continue to support growth in the creative industries with tailored industry-specific tax support.
- Review the tax and National Insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.
- Improve the digital sales tax.
- Remove VAT on sanitary products.
- Reform the place of establishment rules to stop multinationals shifting profits out of the UK.
- Replace business rates in England with a Commercial Landowner Levy based on the land value of commercial sites rather than their entire capital value, to shift the tax burden from tenants to landowners.
- Allow local authorities to increase council tax by up to 500% where homes are being bought as second homes, with a stamp duty surcharge on overseas residents purchasing such properties.
- Review the UK excise duty structure better to support whisky exports in Scotland.
- Devolve air passenger duty.
- Develop a dedicated, progressive Health and Care Tax, offset by other tax reductions.
- Introduce a new levy on tobacco companies.
- Introduce a compulsory levy on gambling companies.
- Close loopholes in the soft drinks industry levy and extend it to include juice and milk-based drinks that are high in added sugar.
- Reform the taxation of international flights to focus on those that fly the most, while reducing costs for those who take one or two international return flights per year.
- Graduate stamp duty land tax in accordance with the energy rating of the property and reduce VAT on home insulation.
- Accelerate the transition to ultra-low emission transport through taxation, subsidy and regulation.
- Reform vehicle taxation and cut VAT on electric vehicles to 5%.
- Amend the current HGV road user levy to take account of carbon emissions.
Key proposals include increasing income tax rates by 1% and ending retrospective tax changes, such as the loan charge.
- Abolish capital gains tax-free allowance and instead tax capital gains and salaries through a single tax-free allowance.
- Increase income tax rates by 1p for basic, higher and additional rate tax bands (excluding Scotland), and ringfence the funds for investment in mental health.
- End retrospective tax changes, such as the loan charge, and review recent proposals to change IR35 rules.
- Scrap the marriage tax allowance.
- Introduce a general anti-avoidance rule and set a target for HMRC to reduce the tax gap.
- Support and build on the OECD’s proposals to require multinationals to pay a level of tax that is more closely related to their sales in every country in which they operate.
- Invest in more HMRC staff.
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.