View more on these topics

Lib Dems reject 50p income tax but vote for £1m lifetime allowance

The Liberal Democrats have narrowly rejected re-introducing the 50p top rate of income tax in a vote at its annual conference in Glasgow.

The Fairer Taxes policy motion, debated on the conference floor, allowed a separate vote on the top rate of income tax with arguments made by leading Lib Dem figures.

Former MP Evan Harris had argued for the re-introduction of the rate, which was cut to 45p in the 2012 budget, in a bid to differentiate the party from the Conservatives.

Lib Dem Treasury spokesman Stephen Williams argued to keep the rate at 45p and was backed by Treasury chief secretary Danny Alexander.

Party president Tim Farron had suggested the party could re-introduce the rate in a series of pre-conference interviews.

The rest of the Fairer Taxes motion was passed and backed plans to cut the lifetime allowance to £1m, from £1.25m, and reform to capital gains tax so inflation is included when calculating gain, alongside a move to align it with income tax. 

The paper also pledged to raise the personal allowance to £12,300 with further crackdowns on corporate tax avoidance and non-domiciles’ tax status. It also reiterated support for a 1 per cent charge on properties worth more than £2m, known as a mansion tax.

Yesterday a Lib Dem internal memo, sent to journalists by mistake, indicated further taxes for people earning more than £50,000.

Bristol West MP Williams said: “I am delighted that the Fairer Tax policy motion has passed, illustrating that Lib Dems believe Government should tax wealth rather than hard work. A mansion tax on properties worth over £2m and personal tax allowance set at the national minimum wage will be fairer than raising the top rate of income tax to 50 per cent.

“I am proud of our strong record of delivering fair taxes in coalition. We will have already delivered a £700 annual tax cut to 24.5 million people and taken 2.7 million lowest earners out of paying tax altogether by 2014.”

Keep in touch with all the latest financial services news from the Lib Dem conference here

Recommended

mm business model update

Business Model Update

This free to attend morning seminar will provide practical insight into making successful changes to your business model, allowing you to: • Identify new opportunities for growth in your business • Attract higher client fees and healthier profits The Business Model Update is free to attend for advisers thanks to our sponsoring partners and will […]

Engage Partnership founders split to launch new businesses

Consultancy Engage Partnership founders Chris Davies and Les Cantlay have split the firm and formed separate businesses. Davies has now formed a new consulting firm, Engage Insight, which retains the former branding of Engage Partnership. He says the split of the business was amicable and was due to Davies and Cantlay wanting to focus on […]

Elderly-People-Paperwork-Old-Pension-Pensioners-700x450.jpg
1

Govt to ‘strengthen’ role of IFAs in LTC funding

Care services minister Norman Lamb says he will “strengthen” the role of regulated advisers in long-term care funding reforms in changes to the Care bill. The bill, currently in the House of Lords, would force local authorities to signpost people funding their own long-term care to “independent” financial advice but not regulated advisers.  Other sources of financial advice […]

judge-gavel-law-justice-fine-ban-500x320.jpg

IFA unauthorised investment advice trial begins

The FCA has begun its prosecution against a banned IFA and his business partner for giving investment advice without being authorised by the regulator. West Midlands-based adviser Gary Hexley is charged with six offences relating to giving unauthorised investment advice, including five counts of dishonestly concealing a material fact. If he is found guilty on […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. The problem with lowering the lifetime allowance all the time is it is effectively bringing more and more people into the tax system e.g. teachers, doctors, and anybody earning over £75,000 within a final salary pension scheme. I don’t call these individuals mega rich millionaires, this is middle England.

    Also by continually changing the lifetime allowance governments are not giving stability to the pension saving arena and effectively stopping people considering retirement planning altogether. Instead of taxing the end product surely it is better to look at the tax relief system if the government want to lower the overall tax relief given. Personally I think this is short sighted as getting as many people out of the benefit system in retirement should be the overall goal of the government rather than penalising savers.

  2. Peter,

    I can only agree. Constant tinkering with the Lifetime Allowance results in a slump in confidence in longer term saving, and a multitude of different protections left to deal with the legacy.

    Rather than stifle amibition at the exit of the pension, there should be constructive debate and thought put into tax relief, and control contributions and costs through a sensible annual allowance.

Leave a comment