This week also saw Plaid Cymru and the Brexit Party set out their pledges to voters, with extra powers for Wales and the scrapping of Inheritance Tax their respective headline tax measures.
Plaid Cymru are seeking additional tax powers for the Welsh Assembly, following the lead of Scotland and Northern Ireland. These include the devolution of Corporation Tax and Air Passenger Duty, as well as the assignment of VAT revenues generated in Wales to the country’s Budget.
To raise £20 billion in addition revenue, Plaid Cymru has proposed:
- Cancelling the proposed cut in Corporation Tax from 19 per cent to 17 per cent [a policy that the Conservatives have said will now not be implemented]
- Restricting income tax relief on pension contributions to the basic rate [20 per cent]
- Increasing employer National Insurance contributions for higher rate and additional rate taxpayers from 2 per cent to 4 per cent
The party also wants to offer special exemptions for employer National Insurance and enhanced R&D tax credits to support areas of high unemployment. In a similar vein, Plaid is proposing to provide tax relief to support town centre investment.
They have also proposed a £25 per week tax credit for households that spend more than 30 per cent of their income on private rented accommodation.
Other measures proposed by the party include reducing tourism VAT on the hospitality industry to 9 per cent in an effort to boost tourism and a review of the tax system to promote better public health (including consideration of the taxation of harmful products such as alcohol and tobacco).
The headline measures in the Brexit Party’s ‘Contract with the People’ include a pledge to abolish Inheritance Tax, which it says raises less than 1 per cent of the UK’s total tax revenue.
The party has also promised:
- Reform of Corporation Tax with a zero rate of tax for the first £10,000 of pre-tax profits. They said that one million companies pay less than £10,000 and that this measure would account for 6 per cent of all Corporation Tax revenue
- The replacement of Business Rates with an [unidentified] ‘simpler system’ to help small high street retailers and leisure operators operating outside the M25. It will fund any reductions in these rates through a new online sales tax
- There is a proposal to improve tax incentives for employers to take on ‘genuine’ apprentices, which will include abolishing the Apprenticeship Levy
- ‘A national debate on our NHS’ which should include consideration of ring-fencing the tax revenues needed to fund health care