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What A Tory Government Means for UK and Global Taxation

freelancesupermarket.com newsroom

RSS 11 May 2015
No one, not even Mr Cameron, truly believed that the Conservatives would walk into Number 10 with an overall majority following GE2015. They have, and the new Cabinet is taking shape. So it's time to look at what the outstanding Tory tax policies were, now we know there's no watered down version of any one manifesto headed our way.

The biggest political upset in most contractors' living memory?

The polls had the Tories and Labour neck and neck. The smart money was on Labour and SNP forming the next coalition.

Labour HQ was even preparing for the two Eds, Miliband and Balls, to be drawing up the next budget on Friday 9th May. Balls has gone, one of several huge political scalps who didn't even keep their seat.

Mr Miliband did hang onto his constituency by the seat of his pants. But the defeat in Scotland by the SNP and this side of the border by the Tories was so complete that Mr Miliband stood down as leader before the day was out.

Abysmal results for UKIP and the Lib Dems also saw their respective leaders left with no choice other than to step down, too. It was the most stunning morning after the night before UK politics has ever seen.

The Tory Tax Tariff

Whatever your political allegiance, for self-employed freelancers and contractors, there's a silver lining. For those in work, any type of work, it does seem that Conservative tax policy is there to help them.

There are no planned increments for either Income Tax nor National Insurance contributions. With VAT capped too, those who earn enough can still take advantage of the flat VAT scheme.

That the BoE has just announced another month of 0.5% on the base lending rate is thus no surprise.

Those at the lower end of the earnings table will benefit, too. The Tories are increasing the personal allowance by almost 20%. Now, anyone earning less than £12,500 will not pay any income tax.

It seems like pointing out the obvious, but they've also stated that those working to minimum wage for 30 hours per week won't pay tax. The interesting thing here is that the minimum personal allowance and the minimum wage will be intrinsically linked from hereon in.

At the other end of the scale, The top rate of income tax is to rise to £50,000 per annum. If you're married and your spouse is a base rate taxpayer, they can transfer £1,060 of tax-free income over to you if they don't use it themselves.

Can the UK afford this lifeline for low earners?

All this has to be paid for, of course. A huge campaign to crack down on tax evasion and aggressive avoidance will go some way towards footing the bill.

For those earning in excess of £150k, they'll see tax relief lessen on their pension contributions. All of this should be simplified as the new Conservative government want the Office of Tax Simplification to play a bigger role.

This will be a positive move for global tax implications. Transparency for all countries and exposure to all automatic tax information for developing countries is on the cards.

For those who enjoy the lucrative status of non-dom, their 'tax by remittance' bill is likely to get higher.

The maximum at the minute is £90,000. Which to me or you, seems astronomical. But to billionaires who live in the UK but can prove foreign parentage or the intent to die overseas? It's small change.

Let's hope the Conservatives make the payment meaningful, allowing our new leaders to make more freelancers at the lower end of the pay scale more comfortable.

If the Tories stick to their manifesto, they could well define themselves as the party for the independent professional. We can but hope.

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