General Election 2024: Reform UK propose big cuts in income, inheritance and corporation taxes

The party says it would abolish Business Rates for high street-based SMEs, offsetting this with an Online Delivery Tax. They would also introduce a higher rate of National Insurance for foreign workers, abolish IR35 rules and promise “major simplification” of the tax system.

Announcing the manifesto Nigel Farage, leader of the party, acknowledged that he doesn’t expect to win the election, however, he suggested that his party could be the ‘real’ opposition to an anticipated Labour government.

In the manifesto, Farage states that: “Our country is worse off, both financially and culturally. The economy is being wrecked by record high taxes, record high national debt, wasteful government spending and nanny state regulations.”

The party’s five ‘core pledges’ are:

1. Imagine smart immigration, not mass immigration: which suggests freezing all non-essential immigration to boost wages, protect public services, end the housing crisis and cut crime.

2. Imagine no more small boats in the Channel: aims to deport Illegal migrants who come to the UK.

3. Imagine no NHS waiting lists: by reforming healthcare the party aims to eliminate NHS waiting lists. This includes providing tax breaks for doctors and nurses to tackle the staffing crisis.

4. Imagine good wages for a hard day’s work: suggests lifting the income tax starting threshold to £20k to save the lowest paid £1,500 per year.  Reform argues that this proposal will take 7 million of the least well-off out of income tax.

5. Imagine affordable, stable energy bills: scrapping energy levies and the Net Zero target to save each household £500 per year.

Refrom’s tax and related proposals

(NB. This section generally uses the party’s own wording, though in places text may have been abridged or truncated. All characterisations of proposals or suggestions of their impacts are the party’s own.)

Personal and family taxes:

• Lift the income tax personal allowance to £20,000 per year and the higher rate threshold to £70,000.  
• Abolish inheritance tax for all estates under £2 million. The rate above £2 million will be 20% tax, with the option to donate to charity instead.
• All frontline NHS and social care staff to pay zero basic rate tax for 3 years.
• Support marriage through the tax system by introducing 25% transferable marriage tax allowance. This would mean no tax on the first £25,000 of income for either spouse.
• Employer immigration tax: Employers’ National Insurance rate will be raised to 20% for foreign workers. Essential foreign health and care workers would be exempt from the tax, as would businesses that employ 5 staff members and under.
• Tax relief of 20% on all private healthcare and insurance, and independent education.

Business taxes:

• Free over 1.2m small and medium sized businesses from corporation tax by lifting the minimum profit threshold to £100,000.
• Reduce the main corporation tax rate to 20%, then to 15% from year three of the parliament.
• Abolish IR35 rules to support sole traders. (Unclear whether this refers just to reversing recent reforms or to wider changes.)
• Abolish Business Rates for high street-based SMEs. Offset this with Online Delivery Tax at 4% for large, multinational enterprises to create a fairer playing field for high streets.
• Cut entrepreneurs’ tax to 5%. (Unclear what this refers to – perhaps Business Asset Disposal Relief?)
• Tax relief for businesses that undertake apprenticeships.
• Change planning laws to support farm shops with zero business rates.
• Offer tax incentives for new pharmacies and those who employ more staff to assist in relieving pressure on A&E.
• Introduce incentives and tax breaks to boost the UK defence industry

Tax compliance and administration:

• “HM Revenue and Customs failed to collect tens of billions in taxes last year due to understaffing and bad management. Improved HMRC competence would deliver lower taxes to British workers.” (No further details provided.)
• “Reform the tax system: Major simplification is needed. At over 21,000 pages, the UK’s tax code is a burden. Hong Kong’s tax code is under 500 pages.” (No further details provided.)
• Cut red tape from HMRC for farmers and the British Cattle Movement Service.

Indirect taxes and duties:

• Lift the VAT threshold to £150,000 to free up small entrepreneurs from red tape.
• Lower fuel duty by 20p per litre for both residential and business users.
• Cut residential Stamp Duty Land Tax to 0% below £750k, to 2% from £750k - £1.5m and cut it to 4% over £1.5m.
• No VAT on school fees. Tax relief of 20% on all independent education.
• Abolish the VAT ‘tourist tax’ (the VAT refund scheme for foreign visitors).
• Provide flexibility, tax incentives and VAT breaks to social care services.

Energy and environment:

• Cut Energy Taxes.
• Scrap VAT on energy bills.
• Scrap environmental levies.
• Scrap Net Zero and related subsidies.
• Scrap annual £10 billion of renewable energy subsidies through equivalent taxes on them.
• Start fast-track licences of North Sea gas and oil.
• Scrapping ULEZ

Other measures:

• Fast-track planning and tax incentives for the development of brownfield sites.
• Scrap section 24 for landlords: restore landlords’ rights to deduct finance costs and mortgage interest from tax on rental income.
• Cut unnecessary regulations within EU laws.
• Boost smaller food processors and abattoirs through tax breaks and other incentives.
• Revitalise the UK’s Fishing Fleet Tax incentives and vocational training to increase UK fishing fleets
• Commence reform of the BBC: the party suggests that the TV licence is taxation without representation and they would scrap it.
• Stop the offshore taxpayer “rip off”: Some larger care home providers are avoiding tax on hundreds of millions of profits through complex offshore property company structures and high-interest shareholder loans.
• Slash red tape to boost industry and exports scrap thousands of laws that hold back British business and damage productivity, including employment laws.