What The New Labour Government Means For Tax

After 14 years of Conservative leadership, Labour, led by Keir Starmer, assumed control following the electoral shift on 4th July. This significant change prompts questions about its impact on business, the economy, and taxation. Donna Branagan from Branagans Accountancy Services shares insights, noting the economic landscape Labour inherited is more challenging than 27 years ago, with government borrowing and debt levels nearly tripling since the 1997/98 financial year.

The new government faces challenges beyond economic figures, including the NHS funding gap, public sector pay negotiations, local council bankruptcies, the housing deficit, potential collapse of Thames Water, overcrowded prisons, and the schools and university funding crisis.

Labour’s manifesto includes tax-raising plans such as reducing tax avoidance, revising non-domiciled taxation rules, levying VAT and business rates on private schools, ending capital gains tax treatment of carried interest, imposing a windfall tax on oil and gas giants, and increasing stamp duty land tax rates on residential property purchases by non-UK residents. The manifesto assures low taxes for working people and pledges not to increase National Insurance, Income Tax, or VAT, while capping corporation tax at 25%.

On the Autumn Budget, Donna comments: “The Chancellor Rachel Reeves has ruled out an emergency Budget, aiming to provide the Office for Budget Responsibility with ten weeks’ notice for an Economic and Fiscal Outlook, with the earliest Budget date being 13th or 18th September.”

Donna concludes: “The new Labour government brings a mix of challenges and opportunities. Our team at Branagans Accountancy Services is dedicated to guiding our clients through these changes, ensuring they remain informed and prepared for any new tax regulations. We are committed to helping businesses and individuals navigate this evolving landscape.”

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Branagans Accountancy Services is closely monitoring tax developments and potential changes. For assistance with your tax or any accounting needs, please contact them at 01709 327 215 or via email at [email protected].