Party tax plans in full
All three main parties now appear to be convinced of the need for tax cuts, with the issue dominating their activities today.
Gordon Brown’s monthly press conference was moved to 10:30 BST this morning to make way for the remembrance service, leading David Cameron to schedule one for 08:30.
The twin attack provoked an electoral atmosphere, with Nick Clegg gearing up to reiterate his party’s position on the subject at a speech later tonight.
But what exactly are they proposing?
Liberal Democrats
The Lib Dem plans would see a 4p reduction in the basic rate of income tax.
It would be funded by four main changes:
Upper pensions relief would be scrapped, meaning no extra public money went to wealth pensioners.
Capital gains would be taxed at the same rate as income, seriously affecting bankers and executives.
Further green taxes would be implemented.
More would be done about corporation tax.
Conservatives
Companies which employ someone who has been on unemployment benefit would be entitled to tax perks of around £2,500 per year per full time employee and £1,250 per part time employee. The money will come from savings made in employment benefit, which, according to the Tories, costs the government £8,000 per person per year.
To receive the perk companies would have to show that:
The employee was on unemployment benefit for at least three months.
They could not have previously been employed with that company.
They must be on the basic rate of income tax.
The tax break only operates for one year.
The tax break is only available for 20 per cent of the business’s workforce.
The new employee must only be on the basic rate of income tax – paying 20 per cent income tax on their earnings.
The tax break would only available for one year.
The tax break would only available for up to 20 per cent of a businesses workforce
Labour
We won’t know what Labour’s exact plans are until the pre-budget report later this month (probably this week). These are some of the options available to Gordon Brown.
Increase pensioners’ winter fuel allowance – politically attractive and highly likely.
Temporary VAT cut – increases spending but international results are varied.
Small business cuts – Tory policy, and would have limited effect.
Half-year corporation tax break – Tory policy and insufficiently targeted.
Raising tax allowances – Easy, somewhat effective, politically attractive.
Scrapping NI payments for new workers – Tory policy, and harms UK economy’s image.
Increased tax credits – Pure Brownite economics, although many experts are falling increasingly out of love with this method of distributing income.
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