General Election – What are the main parties tax policies?

With voting for the General Election taking place on Thursday, what are the tax policies that have been pledged? We have outlined those proposed by the main parties that could affect you and your business.


Having previously planned to reduce corporation tax to 17% from April 2020, the Conservatives’ have pledged to keep it at the current rate of 19%. R&D tax credits and the structures and building allowance will be increased by 1% . Employment allowance will also be increased by £1,000.

The party has also promised that it won’t increase the rates of income tax, VAT and NI and will eventually increase the NI threshold so that it is in line with income tax (£12,500).

Despite the recent changes to entrepreneurs’ relief the manifesto mentions further reviews and reform in this area.


Dividends and capital gains will be taxed at income tax rates. This will coincide with an increase of income tax rates to 45% for those earning over £80,000. Income or capital gains over £125,000 will be taxed at 50%. The abolition of entrepreneurs’ relief, the marriage allowance and R&D tax credits (for large companies) is also planned should Labour be successful.

The small profits rate for corporation tax would be reintroduced. The small profits rate will be 21% and the main rate of corporation tax will reach 26% by 2022.

20% VAT will be introduced on fees for private schools along with a 200% council tax levy on holiday homes under a Labour government.

Liberal Democrats.

The Liberal Democrats are proposing 1% increases to income tax and corporation tax rates. The party also wants to abolish the capital gains tax annual exemption and increase council tax on second homes by 500%.

The Liberal Democrats also plan to expand the apprenticeship levy and the scope of R&D tax credits.