General Election 2024: Conservative and Labour key manifesto taxation proposals
With the general election fast approaching and a constant stream of proposed policy announcements being made by all major parties it can be difficult to cut through the noise and stay abreast of the parties’ position on key issues. Tax is often one of the major considerations for each party and voters at election time and we have set-out below a high-level side by side summary of the key tax announcements in the Conservative and Labour manifestos.
Whilst there is some consistency in the approach of both parties in seeking to lock in the current rates for many taxes and to generally be seen to be business friendly and promoting growth, there are a number of key differences in approach which come to light when the policies are put side by side.
| Tax | Conservative | Labour |
|---|---|---|
| Income Tax (IT) and National Insurance (NICs) | Maintain the current rates of income tax. | No increase in income tax or NICs. |
| The Conservatives froze income tax thresholds in the 21/22 tax year and they have confirmed they will remain frozen until 2028. | Current rates of IT will remain frozen until 2028 for all. | |
| Reduce employee class 1 NICs by 1% in April 2026 and 2% by April 2027, meaning will have gone from 12% at start of this year to 6% by April 2027. The party’s long-term plan is to abolish NICs altogether; however, no date has been set. | Reform apprenticeship levy with new Growth and Skills Levy. | |
| The Conservative Party plan to reduce self-employed NICs (class 4) by 1% each year and abolish it completely by April 2029. | ||
| Introduce a “Triple Lock Plus” for pensioners from April 2025. This regime plans to increase the personal allowance for pensioners every year, to make sure income tax isn’t payable on state pension (guaranteeing that both the State Pension and the tax free allowance for pensioners always rise with the highest of inflation, earnings or 2.5%). | The Labour Party has not matched the Conservative Party’s “Triple Lock Plus” commitment to increase the personal allowance on state pensions but will maintain the current triple lock scheme for pensioners. | |
| The Child Benefit threshold will be raised to £120,000 based on combined household income. | ||
| Capital Gains Tax (CGT) | Maintain the current rates of CGT. | The Labour Party have not ruled out changes to the current rates of CGT in their manifesto. Whilst no increases have been announced it has led to a significant amount of speculation that there could be future increases. |
| CGT relief for landlords who sell property to their tenants for two years. | Fundamental changes to the taxation of carried interest in private equity funds. Labour proposes to tax carried interest as income, potentially at a higher rate of 45% (though the rate and detail remains to be confirmed), rather than as a capital gain at the currently lower rate of 28%. | |
| Retain a number of key reliefs, including EIS, SEIS, VCT and Business Assets Disposal Relief. | ||
| Maintain private residence relief so no CGT on people’s homes. | ||
| Inheritance Tax (IHT) | Retain Agricultural Property and Business Property Reliefs. | End the use of offshore trusts to avoid inheritance tax and will subject all assets in offshore trusts to IHT. |
| Non-Dom Regime | The Conservative Party announced their plans to abolish the non-dom regime and introduce a new residence-based regime at the last election (no specific mention in the manifesto). | Abolish the non-dom status and replace it with a modern scheme for people genuinely in the UK for short period. |
| VAT | No increase in the current rates of VAT. | No increase in the current rates of VAT. |
| Keep the current £90,000 VAT registration threshold under review and explore options to smooth the cliff edge at £90,000. | VAT on private school fees and removal of business rates relief for private schools (or future equivalent). | |
| Stamp Duty Land Tax (SDLT) | Indefinitely maintain the existing £425,000 threshold before first time buyers in England and Northern Ireland have to pay SDLT (currently due to end in March next year). They will freeze all other rates and bands of SDLT. | Increase the surcharge for overseas buyers of UK residential property by 1% SDLT. |
| Tax Avoidance | The Conservatives have pledged to tackle tax avoidance by tightening regulations and enhancing enforcement against tax avoidance and evasion by closing loopholes and improving the tax collection system. The party’s plans involve increasing penalties and targeting avoidance schemes. | Renewed focus on tax avoidance by large businesses and the wealthy. |
| Modernise HMRC and change law to challenge tax avoidance – increase registration and reporting requirements, strengthen HMRC powers, invest in new technology and build capacity in HMRC. | ||
| Corp Tax | Maintain the current corporation tax rate at 25%. | Maintain the current corporation tax rate at 25%. Commitment to act if tax changes in other countries pose a risk to UK competitiveness. |
| Maintain current R&D reliefs. | Labour will provide a road map for business for the next parliament if elected to allow businesses to plan and have committed to one major fiscal event only per year to limit changes. | |
| Extend full expensing for capital allowances to leasing when the fiscal conditions allow. | Retain permanent full expensing for capital allowances and annual investment allowance for small businesses and create greater clarity on what qualifies for allowances. | |
| Allow more companies to be considered medium sized by lifting the employee threshold to ease burden of admin for e.g. transfer pricing rules. | In England, replace business rates to level playing field between high street and online giants. | |
| Increase business rates paid on warehouses by online retailers. | ||
| Levies and windfall taxes | Extend the Energy Profits Levy for oil and gas if prices do not fall. | Extend the sunset clause in the Energy Profits Levy until the end of the next parliament. They will also increase the rate by 3% and remove reinvestment reliefs. |
| Guarantee no new green levies or charges. |
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