The 2024 election is just around the corner, and the political rivals are already making their moves to secure your vote. As expected, one of the key battlegrounds in this election will be taxes ...
But with the country facing a huge deficit and mounting debt, can these promises be fulfilled? And what are the implications for the average taxpayer?
First up, we have the Conservative Party, led by Prime Minister Rishi Sunak. In their recently unveiled manifesto, the Tories have pledged to deliver a whopping £17 billion in tax cuts. This includes further cuts to National Insurance by 2027, with the eventual goal of phasing out this 'double tax on jobs' completely.
They have also promised to scrap stamp duty on properties worth up to £425,000, in a bid to boost first-time buyers and resurrect the Helt To Buy scheme. All are unfunded, and with a shortage of properties, people may need to move out of their local area to be able to even find a property.
They also pledge more tax breaks for the self-employed, an increase in the personal tax-free allowance for pensioners and pay for all this with cuts to the Welfare state and by reducing the number of Civil Servants (how is that policy working out for HMRC?). The only question I have for the Tories right now is, "Why didn't you do this in the last parliament?"
The Labour Party are talking up 'wealth creation', which is strange since they want to further tax the wealthy. They want to decrease inflation and improve the living standards of 'working people' who they haven't represented for decades.
They want more funding for training, skills and technology and want to increase house-building and increase green investments. Removing non-dom status, putting VAT on private schools and introducing more windfall taxes on energy profits. They also want to spend £24bn on green initiatives which is more than the commitment for health or education.
Overall, it's not a very inspiring or radical manifesto and some of it could cause more problems than it solves. Tread very carefully in the Treasury Rachel Reeves.
The Liberal Democrats are offering what they call 'a fair deal' with free personal care in England similar to the system in Scotland. More GPs, faster cancer treatment and increased public spending may be welcomed by some, but they will be keeping the current tax thresholds which wouldn't do anything to reduce the tax burden.
Scrapping the two-child limit on Child Tax Credits and reforming Universal Credit will create an 'essential guarantee' of income, but that only means more spending on the Welfare State and not less. It's a bit of a whishy-washy manifesto and I can only see historical remainers voting for the LibDems as they're still committed to rejoining the EU's single market.
Whatever you think about Nigel Farage and Richard Tice, you have to realise they are appealing to a lot of people who were devout Tories before. When the Conservative Party defenestrated Boris Johnson, a lot of the Red Wall voters who chose Tory in 2019 are now politically homeless, and Reform UK is hoovering them up,
Staying away from the controversial stuff, Reform UK are pledging big tax cuts for small businesses. Introducing a Corporation Tax allowance of £100K in profits and lifting VAT thresholds would really get the economy moving and that would all be paid for with an online delivery tax for multinationals like Amazon.
An interesting way to raise money is not a tax pledge, but a refusal to pay interest on bonds held at the Bank of England which became unmanageable after the 2008 financial crisis. Although this may increase the price of borrowing for individuals and businesses, you have to admire Reform UK's willingness to think outside the box.
In Diametric opposition to the Labour Party, Reform UK will actually offer tax breaks on independent and private school fees as well as create a new NHS funding model which sees tax breaks for those going private instead of leaning on the National Health Service when they're ill.
Each party says they can afford it, and each party has been questioned by very sceptical economists. Remember, a manifesto isn't a chiselled-in-stone promise, but more of a 'we'll try and do this' kind of promise. We won't know the effect of any of these manifesto pledges until after the first 100 days of a new parliament.
Whatever your political leaning, do remember to vote on the 4th of July!.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.