There are no strong divergences between the two main parties when it comes to individual tax. Labour has ‘no plans’ to increase taxes, whilst the Conservatives want to cut taxes in some areas (National Insurance contributions, CGT for landlords).
R&D Funding
The Conservatives vow to increase R&D funding from £20bn to £22bn, and will try to bring more SMEs into the scope of R&D. Labour instead vow to invest in technologies and resource at HMRC, to tackle the tax gap, and specifically tackling tax avoidance in larger businesses and the wealthy.
An increase in R&D may sound welcome, but arguably addressing the root causes of R&D claims being denied, due for example to HMRC inefficiencies, would go further in the longer term.
Non-domicile regime
The Conservatives are out of time to see through their reforms to the non-domicile regime before the Election, but Labour have also promised to abolish non-dom status ‘once and for all’.
As ever, the devil will be in the detail, once any changes to non-dom status are announced and fully fleshed out by the party in power. This may well be important for those who use their wealth to invest in tech, as any adverse impacts to the overall UK tax bill may dissuade some individuals from bringing their cash to the UK, or residing here at all.
Digital Services Tax
The Liberal Democrats want to increase the Digital Services Tax from 2% to 6%, and this would go towards funding a dedicated mental health professional in every primary and secondary school.
This move may not be popular with those who will have to pay the tax – particularly our friends in the US – and the overall increase, although in the billions, likely wouldn’t stretch very far.
Labour also ‘backs international efforts to make sure multinational tech companies pay their fair share of tax’ but there’s no further detail beyond them stating they support the implementation of the OECD global minimum rate of corporate taxation.
Technology Investment
The Conservatives, Labour, and the Liberal Democrats all vow to invest in technologies to improve in Medtech, Fintech, Cleantech, GreenTech etc, AI features quite heavily throughout the manifestos as well, with AI being promised to improve efficiencies in the NHS, the civil service, policing, and in the armed forces.
It’s no surprise that all parties want the UK to be a ‘leading power’ in tech, innovation and business growth, and the overall message to tech companies is that there should be continued investment, along with a commitment to using technology safely, in the years to come. Of course, it remains to be seen how this will materialise.