Election 2015: Impact On Tax

Irwin Mitchell Highlights What The Implications Are

08.05.2015

Karen Roberts, Press Officer | 0207 400 8714

Today's General Election result has delivered a majority for the Conservatives and will see David Cameron return to Downing Street as Prime Minister.

Alex Barnes, Tax Partner at Irwin Mitchell, explains what the outcome could mean.

Expert Opinion
"A win by the narrowest of margins but the Conservative party won’t care. The electorate have spoken and in large part it is no doubt the Tories record on the economy that has helped to lead them to victory. So what can we now expect in respect of tax for the next five years?

"The Conservatives pledged not to raise income tax, NICs or VAT until 2020 in their pre-election manifesto and David Cameron said this "five-year-tax lock" would be enshrined in legislation. Whether this was an empty pre-election promise remains to be seen but many have warned it could undermine Britain's fiscal credibility.

"Aggressive tax planning is going to continue to be targeted including ensuring global companies pay their ‘fair share’ of UK tax and whilst non-doms can breathe a sigh of relief that the Labour party have not got in, they cannot rest easy as the Tories have made it clear they intend to increase the remittance based charges applicable to non-doms and to tackle other ‘tax abuses’ committed by non-doms.

"Bankers will continue to be targeted as the bank levy will remain and only time will tell whether this will cause more global banks to relocate outside the UK as HSBC are currently considering.

"For property investors/owner occupiers, the Tories have pledged to set a new ‘significantly higher level’ for the capital allowances annual investment allowance and there is of course the on-going review of business rates with a report on this hopefully appearing in the 2016 Budget.

"Whether all or any of the pre-election pledges made by the Conservative party actually materialise remain to be seen. Many promises are made pre-election that come to nothing. Businesses in general are in the short term likely to be relieved the Tories have been re-elected. There is now however the EU referendum looming which will create uncertainty for many businesses and ultimately may have a negative impact on them."
Alex Barnes, Partner