Whilst Brexit undoubtedly dominates the headlines for the imminent December General Election there is much of interest to rural constituents and farm and estate businesses in the smaller print of the manifestos of the two main political parties.
Martyn Dobinson, a partner at Saffery Champness and a member of the firm’s Landed Estates & Rural Business Group, has carried out a scan of some of the policies that will affect rural taxpayers and business owners, as well as some of the mainstream pledges.
On Brexit, Labour wants Brexit sorted within six months, and a revised Brexit deal going to a second referendum with a ‘remain’ option. The Conservatives on the other hand want to “get Brexit done” with a withdrawal agreement Bill back to Parliament before Christmas. In contrast, the Liberal Democrats’ headline policy is to revoke Article 20 so that the UK stays in the EU.
Personal tax
Labour want:
- A 50% rate on incomes over £125,000, and 45% on incomes over £80,000.
The Conservatives want:
- A triple tax lock with a commitment to no increases in income tax, National Insurance or VAT for five years.
- Raising the National Insurance threshold to £9,500 next year, and then potentially to £12,500.
Business
Labour want:
- Entrepreneur’s Relief scrapped, but a new incentive introduced.
- Corporation tax to be raised by 2% to 21%, to 24% in 2021, and to 26% in 2022, including a new small company rate.
- A phasing out of R&D tax credits in favour of direct state funding.
- Replacement of Business Rates with a new Land Value Tax.
The Conservatives want:
- The current 19% rate for corporation tax maintained.
- “Review and reform” of Entrepreneurs’ Relief (which may mean abolition).
- An increase in R&D tax credits to 13%, plus some revisions to the definition.
- A new £600 million a year National Skills Fund for five years.A fundamental review of the Business Rates system.
Homes and property
Labour want:
- More than 1 million new homes to be built over the next decade.
- Rent controls, with a cap on rent rises at inflation, plus the introduction of open-ended tenancies.
- A second homes tax – an annual levy equal to 200% of the current Council Tax bill proposed.
The Conservatives want:
- 300,000 new homes per year to be built by the mid-2020s.
- A Stamp Duty surcharge for non-UK residents buying UK residential property.
- £6.3 billion set aside for upgrading homes, including grants for improving boilers and insulation.
And some other pledges:
The Conservatives want a tighter immigration policy, with an Australian-style points system. They also propose a guarantee of the current annual budget for farmers for the duration of the next Parliament. Labour want capital gains to be taxed at the same rate as income and the CGT annual exemption replaced with a £1,000 de minimis threshold, and a comprehensive review of all tax reliefs. The Liberal Democrats want 80% of UK energy generated from renewable sources by 2030 and 60 million trees planted per year.
Martyn Dobinson comments:
“As ever, the manifestos contain all manner of promises, which only see the light of day when the prospect of a future government is the prize. Undoubtedly, to secure their delivery, if and when that happens, there will be some changes to the tax regime after this election, whatever the colour of our future government. Brexit however remains the inescapable feature of any debate up until election day.”
