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Key facts on tax before the election

I know everyone is close to 'electioned out' - but thought that this may be a good time to remind you of the stance taken by each of Labour, Conservative and Liberal Democrats on key taxes.  I set out below a summary based on the manifestos and some speeches - the blanks mean I could find no comment on proposed changes and leave you to draw your own conclusions on that. 

 

 

Labour

Conservative

Lib-Dems

Corporation tax

     

Rates

 

Reduce rates from 28% and 21% to 25% and 20%  - paid for by reducing complex reliefs and allowances

 

The future

Crack-down on avoidance

5 year road map to provide certainty

Crack-down on avoidance

Foreign investment

 

Simplify CFC rules & consult on a territorial system

 

Intellectual property

Patent box company tax breaks

   

R&D

Commitment to incentives

Improve and refocus relief

No comment

       

National Insurance

   

Rates & thresholds

1% increase from April 2011

No increase from April 2011 and raise payment thresholds

Look to reverse increase when funds permit

       

Income tax

     

Personal allowance

Reduced for incomes over £100,000

 

Increase to £10,000

Pensions

Restrict tax relief for high earners

 

Abolish all higher rate relief on pensions

Non-domiciles

 

Flat rate levy

No tax breaks after 7 years

       

Capital gains tax

     

Rates & reliefs

 

Entrepreneurs relief up to £2 million

Gains to be taxed at income tax rates

       

Inheritance tax

     

Threshold

Freeze threshold until 2014/15 

Raise threshold to £1 million  

 

 I hope this provides some clarity.

Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Cathy you can call her on 01908 605552. 

 

 

Date: 4th May, 2010
Author: Cathy Corns

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