December 2019 General Election: Our tax review of the Liberal Democrat manifesto
Liberal Democrats proposing reforms
As with Labour, the Liberal Democrats are proposing significant reforms to business taxation and to the taxation of capital gains and income through a single allowance.
The party’s main focus is on tackling climate change through a number of tax measures, including changes to stamp duty land tax, VAT and air passenger duty.
- 1% increase to all income tax rates
- Scrap the Marriage allowance
Capital Gains Tax
- Align income and capital gains through a single allowance. This sees the abolition of the capital gains annual exemption and the taxation of gains at the same rates of income tax.
- Increase corporation tax to 20%.
- Replace business rates in England with a Commercial Landowner Levy based solely on the land value of commercial sites. Payable by the landowner rather than the tenant.
- Extend R&D tax credits against the cost of purchasing datasets and cloud computing.
- A new ‘start-up allowance’ to help those starting a new business with their living costs in the crucial first weeks of their business
- Reduction in the VAT rate from 20% to 5% on electric vehicles. We do not know whether this affect sales of both new and used vehicles?
- End retrospective tax changes like the loan charge.
- Review of proposed changes to IR35.
- Allow local authorities to increase council tax by up to 500% on second homes.
- A stamp duty land tax surcharge on overseas residents purchasing second homes in the UK.
- Encourage employers to promote employee ownership by giving staff in listed companies with more than 250 employees a right to request shares, to be held in trust for the benefit of employees.