We are summarising the key points from the three main political party manifestos that impact financial planning. Here are the key policies from the Liberal Democrats:
- Increase all rates of income tax by 1%.
- Abolish the capital gains tax annual exemption and instead “tax capital gains and salaries through a single allowance”. Although the manifesto does not explicitly say so, based on previous LibDem policy statements this can be taken to mean gains are to be taxed as income.
- Scrap the Marriage Tax Allowance.
- Review “the recent proposals to change the IR35 rules” (presumably the 2020/21 start of the off-payroll working rules in the private sector).
- “End retrospective tax changes like the loan charge”.
- No comment on inheritance tax.
- Increase corporation tax to 20% “and keep the rate is stable with a predictable future”.
- Encourage new forms of incorporation and a diversity of business types.
- “Simplify business taxation to lower administration costs … and reduce opportunities for tax avoidance.”
- Replace Business Rates in England with a Commercial Landowner Levy based solely on the land value of commercial sites, shifting the burden of taxation from tenants to landowners.
- Encourage employers to promote employee ownership by giving staff in listed companies with more than 250 employees a right to request shares, to be held in trust for the benefit of employees.
- Introduce a General Anti-Avoidance Rule.
- Reform place of establishment rules.
- Increase the Digital Services Tax from 2% to 6%.
- Modernise employment rights for the ‘gig economy’ by:
- Establishing a new ‘dependent contractor’ employment status in between employment and self-employment, with entitlements to basic rights such as minimum earnings levels, sick pay and holiday entitlement.
- Reviewing the tax and national insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.
- Setting a 20% higher minimum wage for people on zero-hour contracts.
- Giving a right to request a fixed-hours contract after 12 months for ‘zero hours’ and agency workers, not to be unreasonably refused.
- Reviewing rules concerning pensions so that those in the gig economy don’t lose out, and portability between roles is protected.
- Shifting the burden of proof in employment tribunals regarding employment status from individual to employer.
- Require all companies registered in the UK and listed on UK stock exchanges to set targets consistent with the Paris Agreement on climate change and to report on their implementation; and establish a general corporate duty of care for the environment and human rights.
- Regulate financial services to encourage green investments, including requiring pension funds and managers to show that their portfolio investments are consistent with the Paris Agreement, and creating new powers for regulators to act if banks and other investors are not managing climate risks properly.
- Offer free, high-quality childcare for every child aged two to four and children aged between nine and 24 months where their parents or guardians are in work: 35 hours a week, 48 weeks a year.
- Increase the funding for these free hours to cover the actual cost of nursery provision.
- In the long term, commission the development of a dedicated, progressive Health and Care Tax, offset by other tax reductions, on the basis of wide consultation and extensive engagement with the public.
- “Retain the Triple Lock on the basic state pension” (presumably this includes the New State Pension, but this is not explicitly stated).
- Ensure that the women born in the 1950s are “properly compensated for the failure of government to properly notify them of changes to the state pension age, in line with the recommendations of the parliamentary ombudsman”.
- Address continuing inequalities in pensions law for those in same-sex relationships.