The main rates of income tax are introduced in section 6 of the Income Tax Act 2007, with references to the detailed rules elsewhere.
That section, as it stood before Finance Act 2017 (passed three weeks ago) and as presented in Tolley’s Yellow Tax Handbook online, is on the left hand side of the picture below.
The original version, according to legislation.gov.uk, is on the right. And this is only part of the story, and devolution of rate setting powers will continue to add complexity …
Tax advisers (and writers) can charge fees for keeping on top of this sort of stuff, but it’s not always cost effective. And this complexity is not good for taxpayers.
Related: It is important that people understand how the tax system works
The next UK government needs to accept that there will always be tax competition between countries, and that “authentic tax planning arrangements” should be accepted and encouraged, according to the Institute of Directors.
The IoD supports global initiatives to combat “aggressive tax abuse and avoidance,” it said in a May 11 release. But a tax planning white list would reduce confusion and encourage genuine investment decisions and transactions by “removing unnecessary or perceived tax risks,” it said in a budget submission to HM Treasury in January.
Read more, including details of pre-election representations from CBI, BCC, BRC and EEF:
My news story for Tax Analysts, May 13 (paywall)
This is a brief summary of the tax-related pledges set out in the leaked draft manifesto. That draft has been amended today, and the amended manifesto “unanimously agreed”, BBC News has reported.
Labour would seek to “eliminate the current budget deficit within five years” but would borrow to invest for future economic growth.
It would “rule out rises in income tax for those earning below £80,000 a year, on personal national insurance contributions, and on VAT”. Ninety-five percent of taxpayers would be guaranteed no increase in income tax rates, and “everyone would be protected from any increase in personal NICs and VAT”.
A Labour government would “ask large corporations to pay a little more” corporation tax, while keeping the headline rate among the lowest of the major economies. (The party has announced that it would increase the rate for large companies from 19% to 26% by 2020, see Critics cast doubt on Labour plan to increase UK corporation tax rate.) Continue reading “General election: A summary of tax-related pledges in Labour’s draft manifesto”
A Labour government would create a national education service, providing increased funding for schools and colleges by reversing cuts to headline rates of corporation tax, the party announced …
Labour’s proposal is nonsensical, Conservatives said. The main corporation tax rate was reduced from 28 percent in 2010 to 19 percent in 2017. A small profits rate of 20 percent, applying to companies with profits of up to £300,000, was abolished in 2015 when the two rates merged.
Labour said it would increase the main rate to 21 percent in 2018, 24 percent in 2019, and 26 percent in 2020, adding that 26 percent would be the lowest rate in the G-7. A small profits rate would be set at 20 percent in 2018 and 21 percent in 2020 …
My news story for Tax Analysts, May 11 (paywall)