With less than three days to the General Election, for those who are undecided on how to vote here are the tax policies of the various parties in no particular order.
I hope these details help you decide how to cast your vote on Thursday.
As announced in the Budget, the Conservative Party promises to increase the tax-free Personal Allowance to £12,500 and the 40p Income Tax threshold to £50,000.
The Conservatives will pass a new law so that nobody working 30 hours on minimum wage pays Income Tax on what they earn. At £8 an hour that would be £240 a week, or £12,480 a year. They also state that there will be no increases in VAT, National Insurance contributions or Income Tax.
The Manifesto states that they will set a new, significantly higher and permanent level for the Annual Investment Allowance, which will be welcomed by businesses.
The Conservatives also pledge to take the family home out of tax for all but the richest by increasing the effective Inheritance Tax threshold for married couples and civil partners to £1 million, with a transferable main residence allowance of £175,000 per person in addition to the existing £325,000 nil rate band. This will be paid for by reducing the tax relief on pension contributions for people earning more than £150,000.
Labour will reinstate the 50% tax rate for income in excess of £150,000 to help get the deficit down. They will also abolish the beneficial tax rules for non-domiciled individuals so that if they are a UK resident, they will pay UK tax on their worldwide income and gains. In a measure to counter tax evasion, Labour will require Crown Dependencies to produce publicly available registries of the real owners of companies based there.
Labour also pledges not to increase the basic or higher rates of Income Tax, National Insurance or VAT. They will however reintroduce a lower 10p starting rate of tax, paid for by ending the recently introduced transferrable Married Tax Allowance.
They also promise not to extend VAT to food, children’s clothes, books, newspapers or public transport fares. Labour will cut tuition fees from £9,000 to £6,000 a year, funded by restricting tax relief on pension contributions for the highest earners and a Mansion Tax.
Labour state that they will put small businesses first in line for tax cuts. Instead of cutting Corporation Tax again for the largest firms, they will cut, and then freeze business rates for smaller business properties
The Liberal Democrats aim to re-balance the tax system away from taxing work and towards unearned wealth. Like the Conservatives, they will raise the personal allowance to at least £12,500, and they also say there will be no increase in the headline rates of Income Tax, National Insurance, VAT or Corporation Tax.
The Lib Dems pledge to introduce a new Mansion Tax on residential properties worth over £2 million. They also propose reforms to Capital Gains Tax and Dividend Tax relief, refocusing Entrepreneurs’ Relief and additional taxes on the banking sector.
They will establish a review to consider the case for introducing a single rate of tax relief for pensions, which would be designed to be simpler and fairer and which would be set more generously than the current 20% tax relief.
UKIP plan to save £9 billion a year in direct net contributions to the European Union budget by leaving the EU. That will enable them to raise the personal allowance to at least £13,000 and raise the threshold for paying 40% income tax to £55,000. They also propose a new intermediate tax rate of 30% on incomes ranging between £43,500 and £55,000.
A more radical idea is to abolish inheritance tax completely. UKIP also pledge to remove VAT completely from repairs to listed buildings and the sale of sanitary products.
The most radical tax policies are those proposed by the Green Party, such as increasing the main rate of corporation tax back to 30% and the top income tax to 60%. They would also abolish the CGT annual exemption. Like the Lib Dems, the Green Party would also introduce a Wealth Tax at 2% a year on those with more than £2 million capital and use this to reduce employers’ NIC to 8%.
In order to stimulate tourism and the restaurant business, the Green Party would reduce the rate of VAT of restaurant food and hotel accommodation to 5%.