London Office: 020 3755 3235 | Ipswich Office: 01473 384 858 | Email: enquiries@swallow-financial.co.uk
It's Not All About Brexit

News updates from Swallow Financial Planning.

Sign up to our newsletter to receive the latest updates straight to your inbox.

Read More   Get In Touch

It’s Not All About Brexit

It seems more than likely that we will have an election in the not too distant future. Whilst any snap election could be based around the BREXIT debate it is worthwhile considering what the fiscal policies of both major parties are.

In the blue corner we have Boris Johnson (BJ) and Sajid Javid (SJ) and in the red corner we have Jeremy Corbyn (JC) and John Macdonald (JM).

JM has stated that the key underpin of his tax strategy is to deliver an “irreversible shift in wealth and power in favour of working people”.  SJ has a budget coming up where he can express in detail the Conservative plans, to date the thrust of Conservative policy is “low tax and stimulation”.

INCOME TAX RATES

JM has confirmed his views on tax bands so we can compare his comments against those of SJ:

Conservative Labour
Zero tax  £12,500  £12,500
20% tax to:  £80,000  £50,000
40% tax to  £150,000  £80,000
45% tax to  Rest  £123,000
50% tax on income >  £123,000
2.5% Employer tax earnings >  £300,000
5% Employer tax earnings >  £500,000

 

The employer taxes are “an excessive pay levy”

NATIONAL INSURANCE

BJ has indicated an increase to the tax free band and the basic rate bands in line with the above. We don’t know JM’s approach.

CORPORATION TAX

Again we have JM’s views but only comments from the BJ team. Labour would put up corporation tax to 26% but would re-introduce a small company’s rate of 21% (current rate is 19%). The best we can get from the Conservatives is a suggestion to drop corporation tax to 12.5% if we get a no deal BREXIT.

FINANCIAL TRANSACTIONS TAX (FTT) AND STAMP DUTY

At present we have Stamp Duty at .5% on most financial transactions. JM proposes a new FTT to “radically enlarge the scope of UK Stamp Duty”. SJ hasn’t yet commented.

From a financial planning perspective any tax of this kind would reduce the extent of active management of assets and depending upon it’s implementation would lead to a big increase in discretionary Fund management (DFM).

The conservative view is to increase the SDLT tax free threshold to £500,000 from the current £125,000 and not to change the current FTT rates.

COUNCIL TAX

Labour proposes a “radical” (they really like that word!) increase to the tax on property to replace Council tax. The new tax would be based on current values. Again no comments yet from the Conservatives.

INHERITANCE TAX (IHT)

We know the conservatives are considering the proposals of the office of tax simplification (basically tidying up). Labour on the other hand want to abolish IHT in favour of a lifetime gift tax with gifts above a lifetime rate of £125,000 being taxed at the recipients highest rates of income tax (which would be up to 50% under Labour).

SUMMARY

A snap election may seem to boil down to whether or not you wish to leave the European Union. It would be wise for all electors to consider what happens after that decision is made. Clearly the better off are going to pay dearly for a change of colour in our government.

News

The latest news from Swallow Finacial Planning and the financial industry

It’s Not All About Brexit August 30, 2019

It seems more than likely that we will have an election in the not too distant future. Whilst any snap election could...

Legal & General Offload Their Insurance Portfolio August 27, 2019

Legal & General have agreed terms with ReAssure for the transfer of their traditional insurance-based savings, pensions, life and with profits business...

A New Era August 23, 2019

As many of you know, Swallow has been undergoing significant change over the past few months. After parting ways with Ben, we thought...

Swallow Financial Advice Newsletter

The latest news from Swallow Financial Planning and the financial industry