Under the fixed-term parliaments act, which was proposed by the Labour government in 2010 and made part of law in 2011, elections must be held every five years.
The country has 650 seats up for grabs - each for a constituency. An MP takes a seat because he/she has won most of the votes within that constituency/part of the country. The political party with the total number of MP's elected and with the majority of seats (over 50% or a minimum of 326 seats) wins the election. Total votes won't make a difference as the individual seats gained are the important number to look for. In a situation such as in the 2010 election, where both of the leading parties had less than 326 seats, you can expect either a hung parliament or another coalition of two (or more) parties.
The current Conservative-Liberal Democrat coalition government has now been in power since 2010. Since then the country has six-parties (..that hold significant prior vote share..) to choose from when deciding where to place their vote. We will look past what has been achieved thus far and focus primarily on quotes and publications by each of these parties related to their economic outlook and, in particular, taxation.
So, as it's early in the year each of the political parties are yet to produce their finalised and 'costed' manifestos. It won't be possible to directly compare the policies of each party until that point. However, we do have the following information available but as time goes on all will be likely to change.
Conservative Party
Previous 2010 General Election Results: 306 out of 650 total seats available.
- £12.5 billion further slash to the welfare budget.
- Support small business by allowing first twelve employees to be treated as self-employed for tax and benefit purposes.
- Limit the time available to claim past capital allowances for tax relief.
- Raise personal tax free allowance to meet basic minimum wage of £12,500 per year.
- Balance the books by the end of the 2017/18 tax year.
- Further increase investment into cracking down on tax avoidance and tax evasion.
- Rethink the way business rates are applied.
- Allow individual cities to have better control over the tax revenues raised there.
- Continue freeze upon fuel duty escalator and increase the maximum limit on parking fines.
Labour Party
Previous 2010 General Election Results: 258 out of 650 total seats available.
- Rethink the way business rates are applied but in the meantime freeze them until 2016.
- Allow individual cities to have better control over the tax revenues raised there.
- Implement a mansion tax or yearly levy on properties worth over £2 million.
- Cap the amount of tax relief claimable on pension contributions.
- Start balancing the books by running a budget surplus from start of the 2018/19 tax year.
- Restore the starting band of income tax (10 percent) and increase the top rate of tax from the current 45 percent to 50 percent.
- Increase bank levy.
- Prevent planned 1 percent corporation tax cut.
Liberal Democrats
Previous 2010 General Election Results: 57 out of 650 total seats available.
- Raise personal tax free allowance to meet basic minimum wage of £12,500 per year.
- Balance the books by the end of the 2017/18 tax year.
- Scrape away a fifth of the annual deficit immediately through tax increases.
- Implement a mansion tax or yearly levy on properties worth over £2 million.
- Cap the amount of tax relief claimable on pension contributions.
- Overhaul air passenger duty by introducing a plane duty.
UK Independence Party (UKIP)
Previous 2010 General Election Results: 0 out of 650 total seats available.
- No tax on the minimum wage earners.
- Flatter, simpler and lower taxes.
- Cuts to foreign aid (£9bn cut per annum), department for energy and climate change. Cuts also to parts of the Business, Innovation and Skills department. Scrap green subsidies. Scrap department for culture, media and sport.
- Prevent welfare payments for new migrants until tax and national insurance has been paid for five years.
- Increase Jobseekers' allowance for those who have previously been long-term employed.
- Child benefit limited to first two children only.
- Overhaul welfare system.
- Invest in the border force.
- Abolish inheritance tax.
- Add an additional tax band between the current 20% and 40% bands. The new band will be 35% and apply for post-allowance incomes of between £32,285 and £45,000.
- Introduce a turnover tax for big corporations. In an effort to reduce evasion these businesses must pay a floor rate based upon their UK turnover.
- Businesses allowed to discriminate in favour of young British workers.
Green Parties
Previous 2010 General Election Results: 1 out of 650 total seats available.
- Create a fairer tax system - wealthiest contribute more.
- Create a Citizen's Income to replace the welfare system. An amount is calculated to cover an individual's basic needs and is paid to everyone as a right of citizenship. It is unconditional, not means-tested and is paid whether in or out of work.
- Abolish personal tax-free allowances has they are replaced by the Citizen's Income (above). Tax bands are shifted to increase the burden on higher incomes and therefore the current 40 percent rate and above will be increased.
- Taxes are calculated and paid annually but upon income based upon the rolling average of the past five years. This removes the issues with incomes fluctuating and still having a high tax burden year-on-year.
- National insurance as a separate entity is abolished and general income tax increased to compensate.
- CGT, capital gains tax, allowances and exemptions will be removed for non-primary residences. Capital gains will become part of regular income and taxed in the same manner as above.
- Wealth tax implemented as and when beneficial to the country.
- Additional tax created on all stock (or derivative of) trading.
- Overhaul inheritance tax to calculate the tax payable based upon the recipient's financial circumstances - rather than the amount being received.
- Focus on closing loopholes within tax and end double taxation agreements in tax havens. Remove tax advantage of incorporating over regular sole trader businesses.
- Phase out VAT and replace with an 'Eco-tax' focused upon specific non-Eco sectors instead.
- Build an economy less reliant upon fossil fuel or financial sector. Have 45 percent of energy produced using renewable sources by 2030.
- Restore NHS to full public ownership.