General Election 2015: what the manifestos mean for your money
With just three weeks to go until the General Election, the country's major political parties are busy preparing for polling day.
This week sees the launch of their manifestos so here is a round up of all the main pledges and what they mean for your money.
We'll add to this as and when more parties publish their concrete proposals.
- Raise the minimum wage to at least £8 an hour by October 2019
- A 50p tax rate on incomes over £150,000 a year (it is currently 45p)
- A one-year freeze in rail fares and the freezing of gas and electricity bills until 2017
- Abolish the non-domicile tax status and end zero-hour contracts
- Protect Tax Credits, scrap Winter Fuel payments for the wealthiest pensioners, and review Universal Credit.
- Freeze energy bills until 2017 plus increased power for regulator to cut bills during winter
- Extend free childcare from 15 to 25 hours for working parents of three- and four-year-olds, plus new National Primary Childcare Service that will ensure care for Primary school children from 8am to 6pm every day.
- Build at least 200,000 new homes a year by 2020 to help first-time buyers
- Help for renters with guaranteed three-year tenancy periods
- Double paternity leave from two to four weeks and increase paternity pay to £260 a week
- No raise in VAT, National Insurance Contributions or Income Tax at the basic or higher rate
- Cut tuition fees to £6,000 a year and abolish the Bedroom Tax
- A Mansion Tax on properties worth over £2 million.
- Personal income tax allowance to be raised to £12,500 by 2020 and will introduce a £50,000 threshold for 40p rate by 2020.
- A guarantee that those working 30 hours on the minimum wage will not pay any Income Tax at all.
- Continue to increase state pension by at least 2.5% a year
- Reduction in the benefits cap to £23,000
- Double the amount of universal free childcare to 30 hours a week for working parents of three- and four-year-olds
- Inheritance Tax to be removed on couples owning property worth up to £1 million
- 1.3 million housing association tenants to be offered the chance to buy their own home at a discounted rate
- Build 200,000 new starter homes for first-time buyers under 40, to be sold at 20% below market rate
- No raise in VAT, National Insurance Contributions or Income Tax
- Increase the minimum wage to £8.10 this year and to £10 an hour by 2020
- Ban zero hours contracts
- Pay ratio of no more than 10:1 between the best- and worst-paid in any organisation
- Increase public spending by 20% to create one million new jobs
- Introduce a “wealth tax” on the top 1% of earners and a financial transaction tax on the banks
- Introduce higher council tax bands
- Scrap Help To Buy and build 500,000 new council rental homes
- Abolish the Bedroom Tax
- Raise the top rate of tax to 60% (it is currently 45%)
- Free home and loft insulation in areas where people are most at risk of fuel poverty
- Renationalise the railways and cut train fares by 10%
- Free early years childcare
- Child benefit to rise to £40 a week for any child (it is currently £20.70 for the first child and £13.70 for additional children)
- A new flat-rate pension of £180 a week or £310 a week for couples
- Scrap tuition fees and increase school spending by £7 billion
- Cut emissions by 90% by 2030 and ban fracking
- Increase tax-free personal allowance to £12,500
- Guarantee education funding from nursery to age 19 with an extra £2.5 billion. Plus qualified teachers in every classroom
- Invest an additional £8 billion in the NHS
- Eliminate the deficit by 2017/18
- Introduce new green laws to fight climate change and protect nature
- Introduce a High Value Property Levy (aka the Mansion Tax) on homes worth more than £2 million a year
- Triple the amount of paternity leave to six weeks for fathers
- An increase from 15 hours to 20 hours of free childcare a week for all three- and four-year-olds
- Increase tax-free allowance to £13,000 and raise the 40p income tax threshold to £55,000.
- Introduce a new 30p tax rate for those earning between £45,000 and £55,000.
- Cut foreign aid by £9 billion
- Scrap Inheritance Tax completely
- No tax on the minimum wage up to £13,000
- Child benefit to be limited to first two children only
- Hold a referendum on EU membership as soon as possible
- Introduce a flexible state pension window so that when the state pension age increases to 69, retirees will be able to take a lower-rate pension from the age of 65
- Scrap the Barnett Formula – which funds public expenditure in Wales, Scotland and Northern Ireland – with a 'needs based' system
Invented by a Frenchman in 1954 and ironically introduced in the UK on 1 April 1973, VAT is an indirect tax levied on the value added in the production of goods and services, from primary production to final consumption and is paid by the buyer. Its levying is complex, with a number of exemptions and exclusions. For example, in the UK, VAT is payable on chocolate-covered biscuits, but not on chocolate-covered cakes and the non-VAT status of McVitie’s Jaffa Cakes was challenged in a UK court case to determine whether Jaffa Cake was a cake or a biscuit. The judge ruled that the Jaffa Cake is a cake, McVitie’s won the case and VAT is not paid on Jaffa Cakes in the UK.
A scheme originally established in 1944 to provide protection against sickness and unemployment as well as helping fund the National Health Service (NHS) and state benefits. NI contributions are compulsory and based on a person’s earnings above a certain threshold. There are several classes of NI, but which one an individual pays depends on whether they are employed, self-employed, unemployed or an employer. Payment of Class 1 contributions by employees gives them entitlement to the basic state pension, the additional state pension, jobseeker’s allowance, employment and support allowance, maternity allowance and bereavement benefits. From April 2016, to qualify for the full state pension, individuals will need 35 years’ of NI contributions.
The tax levied on the total value of your estate after you die. IHT has to be paid by the beneficiaries of your estate before they can receive any of the money from it. The money can’t be taken from the value of the estate _– it has to be paid before any money can be released. There is an IHT threshold – known as the “nil-rate band” – below which no tax is levied (£325,000 in 2011/12). Any amount above the nil-rate band is subject to tax at 40%. If your estate totals £600,000, there is no tax on the first £325,000; however your estate will pay 40% tax on the remaining £275,000, a total of £110,000. Prudent tax planning can reduce your IHT liability, so always consult a specialist solicitor.