USA Tax policy comparison: Labour and Conservative Parties
The table below summarises the key tax policies contained in the Labour and Conservative Party manifestos. It may not include every measure, so for more insights please visit our Election hub.
Where possible, we have indicated, to the best of our knowledge and based on the information currently available, whether each change represents:
A tax increase (in red)
No change (in orange)
A tax cut (in green)
Additional commentary (in black)
Corporate tax
Conservatives | Labour |
No increase to corporation tax rates | Cap corporation tax at 25% |
Extension of full expensing to include leasing, as already stated in the Spring Budget 2024 | Retain a permanent full expensing system for capital investment and the annual allowance for small businesses |
Maintain tax reliefs on research & development | Give firms greater clarity on what qualifies for allowances |
Ensure creative sector tax incentives remain competitive | Publish a roadmap for business taxation for the next Parliament |
Support implementation of the OECD global minimum rate of corporate taxation | |
Back international efforts to make sure multinational tech companies pay their fair share of tax |
Environmental tax
| Conservatives | Labour |
Keep the windfall tax on oil and gas companies (energy profits levy) until 2028/29, unless energy prices drop ‘back to normal’ sooner | Extend the sunset clause in the energy profits levy (windfall tax) until the end of the next Parliament |
Maintain investment allowances for these oil and gas companies | Increase the rate of the energy profits levy by 3% |
No new green levies or charges, including no frequent flyer levy | Remove the investment allowances from the energy profits levy |
| Ensure that green levies on household bills are lower |
Business rates
| Conservatives | Labour |
Gradual increase of the business rate multiplier on distribution warehouses that support online shopping | Replace the business rate system in England, to raise the same revenue but in a fairer way |
End business rates relief for private schools |
SDLT
| Conservatives | Labour |
Make the increased threshold for stamp duty land tax for first time buyers permanent | Increase the rate of stamp duty land tax paid by non-UK residents purchasing residential property from 2% to 3% |
No increase to the rates or levels of stamp duty land tax |
Income tax
| Conservatives | Labour |
No increase to income tax rates | No increases to the basic, higher, or additional rates of income tax |
Introduce a new age-related personal allowance for those over state pension age which rises by the higher of inflation, earnings, or 2.5% to ensure the state pension remains below the tax-free threshold (from April 2025) The “plus” in the “Triple Lock Plus”. | Abolish non-domicile status and replace it with a new scheme for people in the country for a short period |
Maintain the 25% tax free lump sum for pension withdrawals | Tax all carried interest as income rather than as a capital gain |
Keep tax relief for pension contributions at marginal rate |
National insurance
| Conservatives | Labour |
Cut the main rate of national insurance from 8% to 6% for employee’s earnings between £12,570 and £50,270 (to 7% effective April 2025 and 6% effective April 2027) | No increase to national insurance |
Abolish the main rate of national insurance (class 4) for the self-employed charged on earnings between £12,570 and £50,270 (to 5% in April 2025, 4% in April 2026, 3% in April 2027, 2% in April 2028, full abolition April 2029) | |
| Abolish “double tax on work" altogether when financial conditions allow | |
| Will not extend national insurance to employer pension contributions |
Inheritance tax
| Conservatives | Labour |
Retain agricultural property relief and business property relief | End the use of offshore trusts to ‘avoid’ inheritance tax |
Capital gains tax
| Conservatives | Labour |
No increase to capital gains tax | |
Retention of business asset disposal relief | |
Retention of private residence relief | |
Introduction of a two-year temporary capital gains tax relief for landlords selling to existing tenants |
VAT
| Conservatives | Labour |
No increase to VAT rates | No increases to VAT rates |
| Keep the VAT threshold under review and look at options to smooth the cliff edge at £90,000 | End the VAT exemption for private schools |
Anti-avoidance
| Conservatives | Labour |
| Tackle avoidance and evasion by hiring additional HMRC staff, investing in labour-saving technology such as AI, and focusing on problem issues like umbrella companies and regulation of the tax advice market | Tackle avoidance by modernising HMRC and changing the law. Registration and reporting requirements will be increased, HMRC’s powers strengthened, additional capacity built within HMRC and new technology invested in |
| Renewed focus on tax avoidance by large businesses and the wealthy |
Other measures
| Conservatives | Labour |
| Keep tax incentive schemes including the enterprise investment scheme, seed enterprise investment scheme, and venture capital trusts | Committed to one major fiscal event a year, giving families and businesses due warning of tax and spending policies. A forecast from the OBR will accompany it |
| Change the high-income child benefit charge to a household system from April 2026, as announced at Spring Budget 2024, with the threshold for withdrawal set at £120,000 and full withdrawal from £160,000 (from April 2026) |
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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.
Tax legislation
Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. You should always seek appropriate tax advice before making decisions. HMRC Tax Year 2024/25.
