Following the General election on 12 December, Prime Minister Boris Johnson has confirmed that Sajid Javid remains as Chancellor of the Exchequer and no other changes at HM Treasury have been announced. The Prime Minister has however, confirmed that a more significant cabinet reshuffle will take place after the UK leaves the EU on 31 January 2020.
The Conservative manifesto set out a fairly limited number of tax pledges, with commitment to a triple lock on income tax, national insurance contributions (NICs) and VAT, which means there should be no tax hikes forthcoming in these areas. Moreover, the government has said it will raise the National Insurance threshold to £9,500 next year.
However, in the run-up to the election, the Institute of Fiscal Studies warned that some of the Conservatives’ more ambitious manifesto pledges would require additional tax.
Conservative tax pledges set out in the party’s manifesto 2019 are summarised as follows:
Personal tax – retain the triple lock on income tax, NICs and VAT, with rates frozen;
Employment taxes/NICs – NIC threshold to rise to £9,500 in 2020 (currently £8,632); interest rates on student loans will be reviewed;
IR35 – IR 35 legislation to be reviewed;
Capital gains tax – entrepreneur’s relief for businesses is to be reviewed;
Inheritance tax – No changes announced at present;
Corporation tax – the main rate of CT will remain at its current level of 19% and will not be cut to 17% as previously announced;
Research & development (R&D) – tax credit rate will rise to 13% and there is to be a review of the definition of R&D
VAT – VAT to be removed from sanitary products;
Stamp duties – surcharge to be imposed on non-UK resident property buyers;
Digital services tax – this new tax will be introduced;
Tax avoidance – a new anti-tax avoidance and evasion law is to be introduced, doubling the maximum prison sentence to 14 years;
Business rates – business rates to be reduced and business rates relief made available for music venues and cinemas.
If you are concerned about the effect of the General Election on your personal or business tax please call Vincent & Co on 01803 500500