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As you’ve no doubt seen, last night saw the Labour Party win the UK General Election. This prompted a victory speech delivered by Keir Starmer, with the statement ‘change begins now’. But what are these changes and what could they mean for your personal finance? At Danbro Financial Planning, we’ve reviewed the proposals found in Labour’s manifesto and outlined potential changes in taxation, personal finance, investments, housing, and the broader economy. Let’s explore what might be ahead.
 
 

National Insurance – A commitment to no further rises

In the Autumn Statement of 2023, and subsequently the 2024 Budget, reduced rates of National Insurance Contributions (NICs) were introduced. In Labour’s manifesto, the party has pledged to not raise them back up again.

 

Income Tax and VAT to remain at current levels

In a similar theme, according to Labour’s pledges, neither Income Tax nor VAT rates will rise from their current levels.

 

Clamp Down on Tax Evasion

In a bid to raise additional revenue, the party have promised measures to enforce a tighter grip on tax compliance, and tackle tax evasion. Labour have proposed a suite of upgrades to HMRC’s capacity, technology, and powers, with an emphasis on large businesses, seeking additional revenue of over £5bn. The manifesto also indicates plans to close a method of avoiding inheritance tax through the use of offshore trusts.

 

Pensions and Investments

With regard to pensions, Labour have committed to protecting the triple lock guarantee on state pensions. Aside from this, a review into current pension offerings has been announced, with a view to delivering more investment in UK markets and targeting better returns.

Receiving no mention (by neither Labour nor the Conservatives) was the ‘UK ISA’, an additional £5000 ISA Allowance to be used to invest in UK Assets which was announced in the Spring Budget of 2024. This is possibly due to the three-month consultation having only recently ended on June 6th.

 

Housing and House Purchases

In a bid to generate an additional £40m, the party has proposed an increase of 1% in stamp duty for non-UK residents.

Furthermore, they have promised 1.5 million new homes over the next parliament.

 

Raising Additional Funds Through Taxation & Savings

While the party do not plan to raise personal taxes such as Income Tax and VAT, tax rises and savings have been announced elsewhere in order to raise funds.

One such example is the proposed elimination of the current tax relief for private schools. This would mean the addition of the standard VAT rate of 20% to private school fees, which is tipped to generate £1.6bn per year.

As mentioned in the March 2024 Budget, the Conservatives planned to abolish the non-dom tax status and replace it with a residency based system. Labour have indicated general support of this proposal, but aim to add resolutions to issues they believe could cause loopholes.

UK Domicile and Non-Doms – election 2024 explainer (tax.org.uk)

Regarding Capital Gains Tax, meanwhile, Labour have neither announced nor ruled out rises.

 

Questions? Get in Touch

As ever, if you have any further questions about what the results of the election could mean for you, get in touch with our friendly team of experts.

Not worked with us yet? Book a Call

 

Other Useful Sources

 What will Labour do in power and what was in its manifesto? - BBC News

My plan for change – The Labour Party

 

Disclaimer: The Financial Conduct Authority does not regulate tax advice. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

The content of this newsletter is for your general information purposes only and does not constitute advice. It is not an offer to purchase or sell any particular asset and it does not contain all of the information which an investor may require in order to make an investment decision. Please obtain professional advice before entering into any new arrangement. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.

Published July 5th 2024
Blog written by
liam-winstanley
Liam Winstanley
Director & Independent Financial Advisor at Danbro Financial Planning | Website

Liam Winstanley is a Chartered Financial Planner and Independent Financial Advisor. He has worked in financial services for well over two decades, specialising in wealth management and financial planning including things like pensions, investments, retirement planning, financial protection and estate plans.

Liam is the Director of Danbro Financial Planning and is passionate about delivering the very highest standards in service, ethics and professionalism within the financial sector.

Away from Danbro, Liam is an avid long-distance runner and also turns out for his local cricket side, Brinscall CC. He lives in Lancashire with his wife and son.

 

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