General Election: What tax policies do the parties propose?

With an election only weeks away I thought it would be worthwhile pulling together a summary of the tax proposals each main party has put out so far in the campaign. No doubt more will be announced as we approach the big day, but these are the highlights so far at today:

Conservative

Raise the income tax Personal Allowance from £10,600 to £12,500
Raise the starting point for 40% higher rate tax from £42,400 to £50,000
Reduce corporation tax for companies to below its current 20% rate
No raise in Value Added Tax
Restrict tax relief on pensions for people earning £150,000 or more per year

Labour

Re-introduce the 50% additional rate of income tax for those earning over £150,000
Introduce a “mansion tax” on homes worth over £2m
Re-introduce the 10% starting rate of tax
Increase corporation tax from 20% to 21%, and use the saving to:
- Cut business rates for small firms
- Remove the “non-domicile” status for UK resident individuals who originate from outside the UK
Restrict tax relief on pensions for people earning £150,000 or more per year

Liberal-Democrats

Raise the income tax Personal Allowance from £10,600 to £12,500
Introduce a “mansion tax” on homes worth over £2m
Raise £14bn in additional taxes from companies and wealthy individuals

United Kingdom Independence Party

Raise the income tax Personal Allowance from £10,600 to £13,500
Scrap Inheritance Tax
Introduce a new 35% rate of tax on incomes between £42,285 and £55,000 with 40% applying thereafter
Make big businesses pay their “fair share” of taxes

Whilst UKIP is a small party and seem unlikely to gain significant numbers of MPs it could hold the balance of power after the general election so it is worthwhile considering its policies.

The same applies to the Scottish Nationalists who are yet to propose any measures other than repatriation of powers to Scotland. However they seem to be aligning themselves closely with Labour and, as a Socialist party are likely to support most Labour tax plans.