Liberal Democrat tax updates
The Liberal Democrat manifesto includes the following proposals in relation to taxation:
- Increase corporation tax to 20% (to be kept stable going forward).
- Allow companies to claim R&D tax credits against the cost of purchasing datasets and cloud computing.
- Simplify business taxation to lower admin costs and reduce tax avoidance opportunities.
- Ensure a 1% rise in all income tax rates (to be ring-fenced for NHS and social care services).
- Establish dependent contractor employment status and review the tax and NICs status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.
- End retrospective tax changes like the loan charge and review recent proposals to change the IR35 rules.
Capital Gains Tax
- Abolish the separate CGT allowance and taxing salaries and capital gains through a single allowance.
- Replace Business Rates in England with a 'Commercial Landowner Levy' based solely on the land value of commercial sites rather than their entire capital value.
- Set rates of stamp duty land tax relative to the energy rating of the property.
- Allow local authorities to increase council tax by up to 500% on second homes with a stamp duty surcharge on overseas residents purchasing such properties.
- Scrap the Marriage tax allowance.
- Cut VAT on electric vehicles to 5% and reduce VAT on home insulation.
- Reform taxation of international flights to focus on frequent flyers.
The Liberal Democrats have also promised to tackle tax avoidance with: (i) the introduction of a General Anti-Avoidance Rule, (ii) more staff for HMRC, (iii) reform of the place of establishment rules to stop multinationals shifting profits out of the UK, (iv) improvements of the Digital Sales Tax and, (v) building on the OECD's proposals to require multinationals to pay tax in a way which is more closely related to their sales in each country.
22 November 2019
Liberal democrats have proposed to add 1 penny on income tax to fund an extra £7billion a year for the NHS and social care. Read The Telegraph's article on the proposed policy here.
19 November 2019