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Navigating the upcoming election: What to expect and how to prepare

With the election just around the corner, we wanted to share our thoughts on what might lie ahead for you personally and from a company perspective.

Things we think will stay
  • Child benefit high-income tax charge: The income threshold increased to £60,000 from the start of the new tax year in April 2024.
  • Lower National Insurance rate: Introduced by the Conservatives in April 2024.
  • Non-doms changes: These are likely to stay in place from April 2025, though specific plans for non-domiciled individuals in the UK are still pending.
  • Corporation Tax (CT): Labour has promised not to raise CT rates within six months if elected and assured that rates won’t exceed 25%.
  • Income Tax: Both Labour and the Conservatives have committed to freezing income tax thresholds until 2028, meaning no changes to personal allowance or tax bands.
  • Pensions: Labour has confirmed they do not plan on reinstating the Lifetime Allowance for pensions. Given the Conservative party has only recently abolished this, we do not expect to see a return of the Lifetime Pension Allowance regardless of the election outcome. 

Things we think could change
  • Private school fees: Labour has suggested a potential VAT charge on private school fees. If you pay private school fees, it may be worth chatting to your child’s school to see if they have any plans if this comes into play. We can also work with you to discuss bespoke planning to make school fees more tax-efficient.
  • Pensions: Annual Allowances might change in the future. It’s a good idea to make pension contributions now and utilise any unused allowances. We can help with personalised planning, and we always recommend consulting your Financial Adviser before making decisions.
  • Capital Gains Tax (CGT): The Office of Tax Simplification has hinted at aligning CGT with income tax rates. If this did become a reality it would not be immediate and more of a longer-term plan if acted upon. 
  • Inheritance Tax (IHT): IHT has seen few changes since 2017, but a new government might target this area. If you have significant wealth or concerns about a family member’s estate, our tax team can help with IHT planning.
  • Minimum wage: Labour is campaigning to increase the minimum wage.
  • National Insurance: The Conservatives have previously expressed a desire to abolish NI completely, though we don't anticipate this to be an immediate focus, but they have promised a further 2p cut in their manifesto which Labour have confirmed they won’t match. 
  • Stamp Duty: The Conservatives have announced a plan to cut Stamp Duty for some first-time buyers and tax cuts (potentially Capital Gains Tax) for landlords who sell to their tenants. 

Things to consider

  • Tax planning: Review your income and tax position to ensure you’re in the best position. Our planning services can help you achieve your goals.
  • Recruitment: With fewer vacancies available, the quality of candidates is high. If you’re thinking of expanding your team, now might be the time.
  • Project planning: Some clients may be nervous to start internal projects until after the election. Holding onto additional working capital might be wise, as financial reactions to change can be volatile. Effective planning will help with future cash flow and resource management, we can help you make plans to manage your progress.

Changes in government could bring adjustments to taxation and legislation that might impact your personal financial situation. Any changes should be considered in the context of your current financial planning. If you need assistance, our financial planning team is here to help.

If you’d like to chat with our tax or financial planning team, please email tax@thewowcompany.com, and one of our team members will get in touch to arrange a call.