Last week, we mentioned that Sunak announced the general election will take place on 4th July.
The focus of this election primarily centres on the Labour and Tory parties.
Considering the varying tax policies proposed by different organisations, we will help you clarify what needs to be done before the election.
Capital Gains Tax
If you reside in the UK and acquire additional capital gains, you might be affected after the election.
Capital gains tax is the tax payable when individuals sell property, businesses, or other assets.
The annual tax-free allowance has been reduced multiple times over two years by the Tory, now standing at £3,000 per year.
Should Labour win the election, they might abolish the tax-free allowance entirely, meaning every penny of your asset sales would be taxable.
Pensions Annual Allowance
The pensions annual allowance is the maximum amount of pension savings that UK residents can contribute each year without incurring extra taxes.
The current standard annual allowance in the UK is £60,000, and the lifetime allowance for pensions has been abolished.
This significantly reduces tax pressure on high earners, allowing them to save more for retirement.
However, Labour might amend the current standard annual allowance and reconsider reintroducing the lifetime allowance.
Changes to Wages
At present, the national minimum wage in the UK is £11.44 per hour, which Labour might further increase if they win the election.
In addition, Labour plans to ban zero-hour contracts and impose stricter controls on employers. Should you have any uncertainties, feel free to consult our team.
Meanwhile, the Tory propose further cuts to National Insurance, providing visible benefits to workers.
Personal Savings
During the election period, the reduction in savings interest rates will be put on hold, meaning the savings rate will remain around 5%.
If you are considering depositing extra funds into a savings account, now is a favourable time.
With the fixed rate remaining around 5% for an extended period, savers will maximise their returns during the election period.
