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Keir Starmer promises no tax rises for working Brits at Labour’s manifesto launch – how it affects you?
However, other tax rises are still on the cards
KEIR Starmer has pledged not to raise three key taxes paid for by working Brits.
The leader of the Labour Party has ruled out raising income tax, national insurance, or VAT in the next parliament if he's elected.
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The party's manifesto states: "Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT."
It comes after Sir Keir assured voters that he was not planning to raise taxes during the Sky News leader's debate last night.
In a bid to calm nerves about the possibility of shock costs to voters, Sir Keir assured the programme audience he was not planning to put up fuel duty or capital gains tax either.
However, the Labour Party will still raise selected taxes and has not ruled out a series of further hikes in the future.
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Tory Chancellor Jeremy Hunt has branded Labour's plans as a "tax trap" and says that taxes will rise to levels "never before seen".
At the Labour manifesto launch, Sir Keir Starmer…
- Ruled out raising income tax, national insurance, or VAT
- Committed to keeping the pensions triple lock, which increases the state pension each year in line with the highest of inflation, earnings or 2.5%
- Promised a benefits shake-up, working with local authorities to get more disabled and sick people back into employment.
- Said he would cut energy bills and introduce a "warm home grant"
- Pledged to remove the ‘discriminatory’ age bands affecting the National Minimum Wage
- Vowed to ban advertising junk food to children along with the sale of high-caffeine energy drinks to under-16
- Promised to hike defence spending to 2.5% of GDP
- Promised to slap VAT on private schools to fund 6,500 new teachers
- Pledged to build 1.5million new homes
The Labour leader confirmed that tax rises will come from removing the 20% VAT and business rates exemption on all private schools and a crackdown on non-doms.
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Parents are concerned that this will mean school fees could rise by 20%.
Fears are also growing that it could lead to a bulge in class sizes in the state sector.
The manifesto costings say this will raise £1.5 billion and help pay for 6,500 new expert teachers.
The party will also look to close further non-dom tax loopholes and invest in reducing tax avoidance.
They say: "We will abolish non-dom status once and for all, replacing it with a modern scheme for people genuinely in the country for a short period."
Their accounts say this will raise £5.23billion by 2028-29 - enough to fund 40,000 more operations and scans, and free primary school breakfast clubs
Offshore trusts will no longer be able to avoid inheritance tax either.
The Labour Party has also pledged to raise stamp duty rates by 1% for non-UK residents buying properties across the country.
However, the Labour Party's plans do not include any cuts to tax rates.
Follow our live Labour Manifesto coverage here.
WHAT DOES THIS MEAN?
If elected, the Labour Party would maintain the current rate of primary Class 1 NI contributions (NICs) at 8%.
The basic rate of income tax will remain at 20% for earnings between £12,570 and £50,270.
Wages of £50,271 and above will continue to be taxed at the higher rate of 40%.
The 45% additional rate of income tax, which applies to earnings above £150,000 will stay at its current level too.
The Labour Party's manifesto also states that the standard rate of value-added tax (VAT) will remain at 20%.
It comes just days after the PM announced at the Conservative Party's manifesto launch on Tuesday that if elected, his government would slash National Insurance.
Rishi Sunak's offer includes a 2p cut to the main rate of National Insurance.
If elected, the government would slash the main rate of primary Class 1 NI contributions (NICs) from 8% to 6% by 2027.
It means a worker with an average annual salary of £35,000 will be £449 a year better off.
MORE PEOPLE WILL PAY MORE TAX
Both political parties have no plans to increase the threshold at which Brits start paying both National Insurance and income tax.
This is known as the personal allowance, which is currently £12,570 a year and is the total you can earn tax-free each year.
It can change from one year to the next and is set by the government.
This tax threshold remains frozen until 2027-28.
As a result of this, more people are set to pay tax as their income rises.
They could be drawn into paying tax for the first time if their income goes over the £12,570 limit.
Or their earnings could take them into the next tax bracket.
This is known as a "stealth tax", and recent estimates suggest 637,500 Brits will be pushed into paying income tax from 2024 to 2025.
Chancellor Jeremy Hunt has hit out at the Labour tax trap. He said: “This is Labour’s Tax Trap Manifesto which contains only tax rises and no tax cuts. Under Labour’s published plans, taxes will rise to levels never before seen in this country.
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“But that’s only the tax rises they’re telling you about – it doesn’t include the £2,094 of tax rises they’ll need to fill their £38.5 billion unfunded spending commitments.
“So what’s most important is not what’s in Labour’s manifesto, but it’s what they have kept out of it. They are refusing to rule out taxing your job, your home, your pension, your car, your business and they think they can get away with it without anyone holding them to account. Be under no illusion, from cradle to grave you will pay more taxes under Labour.”
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