What does the General Election mean for your tax bill?

Hi I’m Emma Wall and joining me today is
Tom McPhail to talk about what the general election means for your tax bill. Hi Tom. Hello Emma. So how will the different political parties fiddle with taxes if
they get into the position of power? There’s some clear distinctions between
left and right in terms of tax policy and I think broadly we can characterise
it as labor in particular but other parties on the left of the political
spectrum really are looking to impose higher taxation on wealth so that’s the
key distinction is that they will look to impose tax on wealth and on the
wealthier so for example I just want to start with talk about capital gains and
income tax where the Conservatives have said nothing on the subject but Labor
have said that they would tax capital gains and dividends at the same rate as
your income tax is paid and that’s quite a substantial increase for higher
earners the Liberal Democrats similarly have said they would look to merge
capital gains tax and income tax allowances and they reckon that would
raise them about 5 billion pounds so for for those two there’s quite a
distinction between the current Conservative policy. The Greens as well I
want to give them a mention they’ve also talked about merging income tax national
insurance dividends capital gains tax and inheritance tax so they would look
to bundle all of individual taxation into one overall tax rate so I think if
we see a Labor led government on taxation and wealth we’ll see quite a
departure from the current system there And that is both a simplification of the
system which broadly most political parties are in favor of when they talk
about what they want to do to tax but the main take-home for what you’re
saying there is really it’s the wealthy who will feel the brunt of that
simplification That’s correct and if we move on to income tax where the
Conservatives have made a very bold promise that they will not raise the
rates of income tax national insurance or indeed VAT and those three between
them account for around two-thirds of all government tax revenues so that’s a
very big commitment and they’ve gone further than that and said they will
look to raise the national insurance threshold to £9500
fairly immediately and look to push it up to £12500 in the
longer term so that’s
a big commitment there from the Conservatives. Labour on the other hand
have said well the wealthy the higher earners they need to pay more so if
you’re earning more than £80,000 a year you’ll then be facing a
top rate of income tax of 45% and if you earn over £125000 a year you’ll be paying 50% tax and
that’s on top of your national insurance costs as well. Liberal Democrats again
worth picking out them they’ve said they would raise all the bands of income tax
by 1% so up to 21% up to 41% and up
to 46% depending on which band of tax you pay so this is a
contrast to most previous elections where there’s been this relentless
pressure to cut taxes as being the way to appease voters what we’re seeing here
from from at least the Labor and Liberal Democrats is we’re going to raise taxes
and we’re quite unashamed about it and I also just want to pick up on the
marriage allowance where both Labour and the Liberal Democrats have said they
would scrap the current marriage allowance the other parties have have
not made any any commitment on that And then from income tax to income itself
because there have been some promises or some policies that seem to indicate
there’ll be a change to the living wage? Yep so all the parties are talking about
increasing the living wage they recognise that that is an important
policy ground so the Conservatives looking to go to £10.50 an hour
Labour to £10 an hour the Liberal Democrats have said they’ll introduce an
independent review of the living wage the SNP have said they want to raise it
but they’ve given no details the Greens they want to go to £12 an hour
for the living wage so there’s very strong political consensus there that
the bottom earners of society should all be getting a higher hourly rate and on
top of that the Greens have committed to a universal basic income so everybody
would get paid an income from the state if you’re below retirement age it would
be £89 a week above retirement age £178 a week so for pensioners
that’s a very generous payout and interestingly Labour have also said
they’re interested in looking at a pilot on this universal basic income concept
so if we see a Labour government we could see about one surface again Tom, thank you very much Thank you you

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