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Tony Wickenden: What the election result means for tax policy

Will the tax changes dropped from the Finance Bill pre-election get through?

Technical Connection joint managing director Tony Wickenden

This week, I want to look at the facts underpinning what we might expect to come from the Government with regards to tax and financial planning now the election is over.

Of course, there is an awful lot more to consider when you think about who is going to be “in charge” for the next few years but I will concentrate on the bits most relevant to our industry.

The table below serves as a reminder of some extracts from the manifestos of the three main parties in relation to the key tax and financial planning issues.

With regards to tax policy generally, we can expect a hung Parliament to have a dampening effect, with controversial measures being more difficult to get through and, as such, being given less priority.

Will the tax changes that were dropped from the Finance Bill pre-snap election get through? Most seem to think they will, but opposition to the new Government may have more influence than it would have done otherwise. In light of all this, radical change to the pensions landscape seems to be less likely.

So what have the Democratic Unionist Party had to say?

It was with the confidence such a deal could be secured that Prime Minister Theresa May sought permission from the Queen to form a new government the day after the election, and so it has come to pass.

What follows are the key aspects of its manifesto likely to play a part in the ongoing “confidence and supply” arrangements agreed with the Conservatives.

It is important to keep in mind that the DUP is a Northern Ireland party, so has no explicit policy on issues devolved to England, such as social care. The corollary is a focus on specific measures for Northern Ireland only. This is highlighted by the Leader’s Message on the first page of its manifesto, in which Arlene Foster says (ironically, in hindsight):

“Make no mistake, elections matter. On this occasion our votes may not be required to help form a government at Westminster but the implications for politics in Northern Ireland could not be greater.”

A key foundation point the DUP is committed to is that it is staunchly pro-Leave, being the only mainstream party in Northern Ireland to have backed Brexit despite the region more broadly voting to Remain.

Its manifesto states the party will work “to get the best deal” for Northern Ireland: “In the new Parliament, Northern Ireland needs to have a strong, united DUP team arguing the case for our people.”

The manifesto was probably (perhaps unsurprisingly) not written with its current influence in mind. But it appears to support lower corporation tax and is largely in the same boat as the Conservatives in relation to taxation generally.

It also seems to be committed to supporting the continuation of the triple lock, and plans to raise the personal allowance to £12,500.

I will continue this analysis of the what the election result means for financial services next week.

Tony Wickenden is joint managing director of Technical Connection. You can find him Tweeting @tecconn

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