General Election 2024: The Major Parties on Tax

74% of financial advisers say clients have asked them about the impact a potential change in government could have on their finances. With the UK general election just around the corner, we combed through the manifestoes of all the major parties to find out what key things they have planned for tax.


National Insurance, VAT and income tax

In their manifesto, released on 11 June, the Conservatives pledged to take another two pence off employee National Insurance, having announced two separate two pence cuts so far this year. They say this will result in a total tax cut of £1,350 for the average worker on £35,000 a year by April 2027.

For the self-employed, the Conservatives have promised to abolish the main rate of self-employed national insurance by the end of the parliament as they want to “back the risk takers and entrepreneurs”. They say that this will mean 93% of self-employed people will no longer pay self-employed National Insurance.

The party have also recommitted to their long-term ambition of scrapping insurance entirely, “when financial conditions allow,” and promised not to raise VAT or income tax.

Businesses, property and capital gains

Another tax the Conservatives have promised they will not raise is corporation tax. This means that it will remain at its current level of 25%, should they win the general election.

The party have also pledged to retain incentives such as the Enterprise Investment Scheme, Seed Enterprise Investment Scheme, and Venture Capital Trusts. Research & Development reliefs will be maintained as well.

For property owners, the Conservatives have confirmed they will maintain Private Residence Relief so that homes are protected from capital gains tax. In addition, they have committed to introducing a two-year temporary CGT relief for landlords who sell to their existing tenants.


The Conservatives have said they will keep their windfall tax on oil and gas companies until 2028/29, unless prices fall “back to normal sooner.” The tax was originally introduced in 2022, and with the extension the party hope to raise over £6 billion.


National Insurance, VAT and income tax

Labour have pledged that they will not increase income tax, National Insurance or VAT. Instead, they plan to raise around £7 billion from closing ‘loopholes’ within the Conservative’s non-dom plan, cracking down on tax dodgers, and ending the VAT exemption for private schools.

For business taxation, Labour have promised to publish a roadmap within the first six months of office setting out scheduled changes. The party has confirmed, however, that they will cap corporation tax at the current level of 25% for the entire parliament and promise to act if changes in other countries “pose a risk to UK competitiveness.”

Avoidance and private equity ‘loopholes’

Labour hopes to raise up to £5 billion a year by the end of the next parliament modernising HMRC and tackling tax avoidance. It aims to do this by increasing registration and reporting requirements, strengthening HMRC powers and investing in new technology and capacity for HMRC.

Another way Labour plan to close the UK’s tax gap is through closing the ‘loopholes’ they see in the private equity industry with carried interest payouts. Currently, carried interest payments received by private equity executives are treated as capital gains and taxed at 28%. Labour is proposing to end this and treat such payments as income but have not explicitly specified how in their manifesto.


Labour have also pledged to close the ‘loopholes’ in the Conservative’s windfall tax on oil and gas companies by extending the sunset clause in the Energy Profits Levy until the end of the next parliament. The rate of the Energy Profits Levy will also increase by three percentage points under a Labour government and see what Labour has describe as the “unjustifiably generous” investment allowance removed.

Liberal Democrats


The Liberal Democrats have committed to a “proper, one-off” windfall tax on oil and gas companies and pledged to reverse Conservative tax cuts for big banks through the restoration of the Bank Surcharge and Bank Levy revenues to 2016 levels.

Banks and oil majors aren’t the only ones the Liberal Democrats have in their sights, however. The party have also pledged to increase the Digital Services Tax on social media firms and other “tech giants” from 2% to 6% and impose a 4% tax on the share buyback schemes of FTSE 100-listed companies.

Capital gains tax

Another major aspect of the Liberal Democrat’s tax plan is significant reform of the UK’s capital gains system which they say is “exploited by the super wealthy.”

Under their plans, there would be three rates of CGT: 20% for gains up to £50,000, 40% for gains between £50,000 and £100,000, and 45% for gains over £100,000. The annual exemption amount would increase to £5,000 from £3,000 and a new inflation allowance would also be introduced so that inflationary gains are not taxed.

The party estimate that these reforms would raise £5.2 billion a year by 2028/29.


Income and corporation tax

In Reform’s manifesto, released on June 17 as a ‘working draft’, the party pledges to lift the personal allowance to £20,000 a year. The party claim this would free up around seven million people from paying income tax and save every worker almost £1,500 per year. They want the basic tax rate to stay at 20% but say the higher rate of 40% should begin at £70,000. The current starting point for the 40% rate is £50,270.

Under Reform, the minimum profit threshold for corporation tax would be lifted to £100,000. The main rate would be reduced to 20% from 25%, before being reduced again to 15% after five years. Currently, companies with profits below £50,000 pay the ‘small profits rate’ of 19%, while companies with profits between £50,000 and £250,000 pay the main rate of 25%, though the effective rate is reduced by a system of marginal relief.

Inheritance tax

Reform pledge to abolish inheritance tax for all estates under £2 million. For estates above £2 million, the party suggest a 20% tax rate, with an option to donate to charity instead. The current rate is 40% on all estates valued over £325,000.


Carbon tax

The Greens promise to introduce a carbon tax on all fossil fuels, whether produced in the UK or imported. They say the rate would be proportional to the greenhouse gas emissions produced when fuel is burnt and be raised progressively over a decade. They propose an initial rate of £120 per tonne, rising to a maximum of £500 per tonne of carbon emitted within ten years.

Wealth tax

The Greens are also pushing for a ‘wealth tax’ which would tax the wealth of individuals taxpayers with assets above £10 million at 1% and assets above £1 billion at 2% annually. In addition, they are calling for reform of rates on investment income, by aligning them with the tax and national insurance contribution rates on employment income. CGT would also be reformed by the Greens by aligning the rates paid by taxpayers on income and taxable gain.