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Taxes & labour government, what now?

The Quick Version

If you want to save time the simple answer is “Raise them”, if that’s all you need to know stop reading here.

A little More Explanation

“Labour will not raise taxes for working people” was the manifesto headline.

Not much else was said except they will not increase income tax, national insurance & VAT!

What goes unsaid tells you even more.

They have already committed to freezing the personal allowances and rate bands to at least April 2028, which means as your income increases you may well be pulled into high tax brackets, the not surprise is you will pay more tax, now what did they say in that manifesto?

So, what else might change?

Expect to see the Capital Gains Tax rates more closely re-aligned with the income tax rates.

Currently there is no CGT on death, might that change by taxing assets that have increased in value to CGT, and then IHT as well? Double taxes, meaning even more of the wealth you spent your life building will be taken away from your children/beneficiaries.

Don’t expect any changes to the basic IHT threshold even though it hasn’t increased since 2009, another freezing of rates that will mean even more tax is paid.

Labour see using IHT as a way of reducing what they call “generational inequality”. So you and your family are punished for being responsible.

Pensions will be another rea seen as an easy hit for increasing taxes or saving the government money, how about a means tested state pension?

So In Signing off

I must apologise, unfortunately political parties of all hues never announce unpopular tax changes in their manifestos, and either concentrate on what they won’t do or what is popular.

It is always down the line (when there in power) that the unpopular measures are announced, usually as a response to “unforeseen circumstances”, so bring on that Emergency budget so we can get on with raising taxes!

So, expect the Emergency Budget to be with us no later than October but more likely sooner.

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