Spotlight falls on potential tax changes as General Election called

Newsletter issue â€“ June 2024

After much speculation about when The Prime Minister would call a General Election, Rishi Sunak surprised many with his announcement in recent days that it would take place on 4 July. We had expected an Autumn Election, but weâ€™ve ended up with a Summer vote instead. Â

Of course, as with all General Election campaigns, people want to know what it means for their income and what tax changes are likely to occur. With Labourâ€™s consistently vast lead in the opinion polls (around 20 points ahead on average) showing no sign of abating, many are focusing on what a Keir Starmer-led Government might do. One area that has been highlighted is his policy on introducing VAT on private school fees â€“ something Rachel Reeves, the Shadow Chancellor, has consistently spoken about, but which the Conservatives are against.Â Â

Weâ€™ve seen the Conservative Government make National Insurance cuts in the recent Budget and Autumn Statement, and some signaling of an ambition of scrapping NI entirely in the very long run. Chancellor Jeremy Hunt has said early on the campaign trail that he wants to make further cuts. So perhaps that trend would continue if the party regains power.

Weâ€™ve not had any major statements on income tax yet, though Labour has been saying in the last 12 months that it would not be looking to raise either income tax or national insurance.Â

One major difference between Labour and the Conservatives might be on IHT. Itâ€™s been talked about so many times, but will this be the time when the Conservatives commit to scrapping the tax, as has been debated frequently Labour on the other hand has said itâ€™s opposed to its abolition. Â

However, at the time of writing, none of the major parties have published a manifesto so we donâ€™t know quite yet what the major tax pledges are going to be. Watch this space! Â