Following the general election results the country is waking up to a change in government this morning, it is crucial we understand the implications of the Labour Party’s manifesto on businesses and individuals alike.
We have set out to provide here a very high-level summary of the key points that may affect you and your business as we move through the second half of 2024 and beyond.
General Election results on UK taxation
The Labour manifesto pledges not to increase Income Tax, National Insurance, VAT rates, and the main rate of corporation tax. However, it is relatively sparse on firm tax commitments, leaving room for speculation until further details emerge, likely through an additional budget or fiscal announcement. Key proposals include:
- 1% Increase in Stamp Duty Land Tax (SDLT): This applies to residential property purchases by overseas buyers in England and Northern Ireland.
- Changes to Carried Interest: This will impact managers at hedge funds and private equity firms.
- Removal of VAT and Business Rates Exemptions: Private schools will lose these exemptions, alongside anti-forestalling legislation.
- Abolition of Non-Domicile Taxation Status: Changes will also affect offshore trusts and inheritance tax.
- Permanent Full Expensing: The Annual Investment Allowance and permanent full expensing for capital investment will be retained.
- Business Rates System Replacement: In England, the current business rates system will be replaced.
While the potential for additional changes remains, it is important to remember that change can bring both challenges and opportunities. We recommend that you closely monitor future announcements and update your tax planning strategies accordingly. We suggest that you do not make any drastic changes until more detailed or concrete information is available.
We always recommend to our clients that any business adjustments should align with your overall goals and objectives rather than reacting solely to potential tax or political changes.
General Election results on Business Regulation, the proposals
Labour’s manifesto also outlines several proposals aimed at supporting businesses:
- Timely Payments: Ensuring small businesses are paid on time by their customers.
- Exporting Barriers: Improving guidance and removing barriers to exporting for small businesses.
- Access to Capital: Making it easier for small and medium-sized enterprises to access capital.
- Public Contracts: Opening up competition for public contracts, providing small businesses with greater opportunities to bid for work.
General Election results on property landlords
Labour has set out plans to overhaul the regulation of the private rented sector. Specific details and timelines are yet to be published, but key proposals included:
- Abolishing Section 21 “No Fault” Evictions: Ending no-fault evictions.
- Rent Increase Challenges: Granting tenants greater powers to challenge rent increases.
- Housing Standards: Raising housing standards.
- Leasehold System Changes: Enacting changes to the current leasehold system.
- Ground Rent Charges Review: Reviewing ground rent charges.
- Energy Efficiency Standards: Ensuring homes meet minimum energy efficiency standards by 2030.
It is important that landlords stay informed and prepare themselves for potential adjustments in the regulatory landscape. We will keep you as informed and up to date as we can as and when further guidance is released.
In conclusion, the general election results and Labour’s proposed changes may bring significant shifts but this morning as we write this all we can suggest is that you keep up to date, stay informed and be prepared as this may prove crucial when navigating this new political landscape.
If you would like to speak to a member of our team you can contact us on 020 7870 9050 where a member of our team is waiting to help you with corporate and personal tax planning, as well as structuring, re-structuring, share schemes and trusts.
If you would like to speak to our wealth management team about your personal finances or our M&A team about exit planning, we would be happy to take your call.
