So we have a Conservative government what are the tax commitments that they have set out in their manifesto. Of note are:
- raising the threshold at which the higher rate is paid from £42,385 to £50,000. The move will lift 800,000 people out of the 40p rate;
- raise the personal income tax allowance by £2,000 to £12,500 by 2020, a move which will cost the Treasury £5.6billion a year;
- no rise in VAT, national insurance contributions or income tax;
- a crackdown on tax evasion and the “aggressive” avoidance of tax;
- a freeze on working age benefits for two years from April 2016 (exemptions for disability and pensioner benefits);
- Lowering the benefit cap from £26,000 to £23,000 (with exemptions for those receiving Disability Living Allowance or the Personal Independence Payment);
- High income pension savers will be stung under a Conservative government, which would restrict tax relief on pension contributions for those earning more than £150,000 by cutting the annual pension contribution allowance.
- Giving working parents of three and four-year-olds 30 hours of free childcare a week;
- The Conservatives promised a new £175,000 per person transferable allowance for married couples and civil partners when their main residence is passed down to children on death;
- Continuing to increase the state pension through the triple lock system, meaning it rises by at least 2.5%;
- Capping charges on residential care;
- Introducing a single-tier pension; and
- Protecting pensioner benefits like free bus passes and the winter fuel payment.
We will have to see how these measures are actually implemented and in particular look at this years second budget yet to be announced. The devil is always in the detail and of course now they are elected the government may try to interpret (go back on) some of these pledges.
