Tax policies – What have we heard this week?
As we get closer to the General Election, the political parties are setting out their tax and spending policies should they come into power. At this stage of the game, the leaders are looking to gain momentum by putting out soundbites and positive headlines, with the detail still to be released.
We look at some of the key headlines this week. Watch out for updates as we find out more.
Corporation Tax
At the CBI conference and again during the ITV debate, Boris Johnson announced that the planned reduction in the rate of corporation tax from 19% to 17% which was due to take effect on 1 April 2020 will not go ahead. This is in order to raise much needed funds for the NHS.
Corporation tax is charged on taxable profits made by companies. In 2015 a single rate of corporation tax was introduced which taxed profits at 20%. This was reduced to the current rate of 19% for periods commencing 1 April 2017.
The National wage
Currently employers are required to pay their workers over the age of 25 at a minimum rate of £8.21 per hour. With different rates for those in other age brackets of on an apprenticeship. The Living Wage Foundation has encouraged employers to pay the National Living Wage of £9.00 per hour outside of London or the London Rate of £10.55 per hour.
During the ITV debate, Jeremy Corbyn announced proposals to raise the National Living Wage to £10 an hour.
National Insurance
Speaking on a visit to an engineering company in Stockton on Tees today (Wednesday) Boris Johnson announced that the National Insurance threshold would be raised to £12,000. Currently weekly earnings over £166 per week are liable to National Insurance at 12% payable by the employee (14% on earnings above £962 a week) and 13.8% payable by the employer.
This announcement would raise the threshold at which deductions apply to over £230 per week.
By Yedidya Zaiden
Associate Partner
If you have any questions regarding the above, get in touch with Yedidya at yedidya.zaiden@raffingers.co.uk.