By David Manning - Manager, Blockchain & Crypto Team While the title might seem dramatic, it is certainly the sentiment you will find across the array…
The headline tax figures are as follows:
Tax cuts: the key tax cut is the increase in the threshold for employees’ national insurance contributions – to £9.5K with the ‘ultimate ambition’ to come into line with the income tax threshold at £12.5k. Costings suggest ‘ultimate’ means ‘not by 2024’. Also announced – small increases to employment allowance and structures & buildings allowance.
A small increase in R&D tax relief, which judging by footnote to the table, is the RDEC scheme which is available for large companies, not the SME scheme.
Overall circa £3bn tax cuts.
Tax increases: the reversal of the proposed corporation tax cut and instead maintaining 19%. This raises about £6bn a year from 2021.
The benefit from that is shared roughly 50:50 between spending increases and the national insurance cut over the four year period.
As previously announced, a stamp duty land tax surcharge for non-UK resident buyers will be introduced and used to help fund measures to address rough sleeping. Total yield after 4 years is estimated to be £120m.
Finally, there’s a commitment to ‘review and reform’ entrepreneurs’ relief – so it seems reasonable to expect some new limitations/restrictions regardless of the outcome of the election.
Tax guarantees: promises not to raise rates of VAT, national insurance and income tax.
Tax avoidance measures: new anti-tax avoidance and evasion law. Refers to the tax gap being £35bn but the costings document seems to raise only £200m from reducing avoidance…odd.
And that’s it. So far less of a bidding war with Labour and Lib Dems than expected, and not the widely-trailed ‘end to austerity’ (at least in terms of seeing material increases in spending).