We'll be regularly updating this portal with information and commentary on the UK's General Election 2019, with a specific focus on the tax news as that arrives. We'll also be collating the tax information in the handy table below.
We have compiled a brief summary of the main taxation changes that will be relevant to the real estate sector from the main party manifestos and accompanying documents.
The Conservative announcements in relation to the taxation of real estate
The Labour manifesto proposals relevant to taxation of real estate
The Liberal Democrat manifesto proposals in relation to the taxation of real estate
26 November 2019
The Conservative manifesto includes the following proposals in relation to taxation:
Corporation Tax
Income Tax
Capital Gains Tax
Property
Other
Tax System
The Conservatives have pledged to create a single Anti-Tax Evasion unit in HMRC that covers all duties and taxes, from individual errors to deliberate non-compliance and to double the maximum prison term to 14 years for individuals convicted of the most serious examples of tax fraud. They also plan to introduce a new package of anti-evasion measures including measures to 'end tax abuse in the construction sector, crack down on illicit tobacco packaging and further measures to avoid profit-shifting by multinational companies to avoid paying taxes.'
26 November 2019
Labour's manifesto is called "It's Time For Real Change" and, if implemented, their tax proposals would certainly radically alter the current tax landscape. In an election campaign where Brexit and public spending issues have dominated the headlines, the tax policies that had previously been trailed by the two main parties had largely been amendments within the boundaries of the current tax regime e.g. Labour's proposal to increase income tax for those earning more than £80,000 and the Conservative's pledge to reduce national insurance contributions. However, the proposals unveiled in the Labour manifesto and the related documents "Funding Real Change" and "Labour's Fair Tax Programme" include a variety of major changes to the structure and scope of current UK taxation.
This article briefly discusses the following aspects of this:
Conclusion
The Labour tax proposals go far beyond tinkering around the edges of the current tax system and, arguably, given their scope, even playing within its rules. Although Labour considers that its policies are fully costed, the scale of the changes make their impact on government revenues, taxpayer behaviour and the attractiveness of the UK as a place to do business hard to assess. Whether we are given an opportunity to find out how accurate those costings prove to be is now a question for the electorate.
25 November 2019
The Green Party Manifesto provides in relation to tax that the Green Party would:
Corporation Tax
Income Tax and Capital Gains Tax
Other
22 November 2019
The Labour Manifesto states that Labour would:
Corporation Tax
Income Tax
Capital Gains Tax
Other
Tax System
Labour has also promised to launch the “biggest ever crackdown on tax avoidance and evasion and to reform the inefficient system of tax reliefs" and has pledged to "transform the power and resources of HMRC."
22 November 2019
The Liberal Democrat manifesto includes the following proposals in relation to taxation:
Corporation Tax
Income Tax
Capital Gains Tax
Property
Other
Tax System
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
Boris Johnson announces a 3% stamp duty surcharge for non-UK residents buying UK property.
Read the Telegraph's coverage on this news.
22 November 2019
Boris Johnson announces an increase in the National Insurance threshold. Workers will have to earn more than £9,500 following a Conservative post-election budget before they pay National Insurance contributions. It is proposed that this will increase to £12,500 but without a timeframe being outlined. Read the BBC's article on Boris Johnson's pledge.
21 November 2019
At the CBI conference on 18 November Jeremy Corbyn told delegates that those at the top will have to pay their 'fair share' under a Labour administration. But he said that he would work closely with business "because it’s in our common interest to build the high skills green economy of the future".
In his speech to the conference Boris Johnson pledged to cut business taxes such as Business Rates and NI contributions. This is in addition to his reversal of the planned corporation tax cut (see our post here). In his Q&A session he was asked whether he would abolish Entrepreneurs' Relief (as called for by Sir Edward Troup, the former Executive Chair of HMRC (see our post here) but he would not be drawn.
20 November 2019
Labour confirms that its proposals for "inclusive ownership funds" requiring some companies to put at least 10% of their share capital into an employee trust will feature as part of its election manifesto. Read more on this story [Paywall].
19 November 2019
Sir Edward Troup, the former Executive Chair of HMRC, has called for the abolition of entrepreneurs' relief by the incoming government, following December's general election. This is against a growing backdrop of thinktanks and professional bodies calling for its abolition, including Tax Research UK, the Association of Accounting Technicians and the IPPR.
Read the Guardian's article on Sir Edward Troup's call to scrap tax relief here.
Read the IPPR's recent paper: Just tax: reforming the taxation of income from wealth and work.
19 November 2019
Boris Johnson announces that corporation tax will not fall to 17% in a conservative administration. The headline rate of 19%, one of the lowest in the EU, is of course but one element of the 'effective tax rate' which is also impacted by exemptions and reliefs such as R&D credits which the conservatives are proposing to increase.
19 November 2019
The Institute for Public Policy Research (IPPR), a think tank which informs many Labour policies have suggested that capital gains tax rates and income tax rates should be taxed at the same rates: ''We propose that income from wealth should be taxed the same as income from work. Capital gains should be taxed at the same rates as income from employment, and the separate reliefs applied to capital gains tax (CGT) should be abolished.'' For further detail, see the IPPR's recent paper: Just tax: reforming the taxation of income from wealth and work.
Watch this space for updates on Labour's proposals – we expect that it is more likely that, if elected, Labour will reverse the reductions in CGT rates brought in by the Conservatives (raising basic and higher rates from 10%/20% to 18%/28%) rather than align capital and income rates.
19 November 2019
Boris Johnson to announce cuts to employer's National Insurance as part of a range of tax cuts to win over the business community. Read the Evening Standard's article on Boris Johnson's tax cuts pledge here.
19 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
