Labour's tax plans could mean increases in taxes for many people. To optimise your tax planning for a better retirement go to https://ianshadrack.com/retirement-ca...

If income tax, corporation tax and national insurance won't be raised then some of the lesser taxes could have sweeping changes. HMRC connect is a supercomputer that snoops on you to make sure your tax return captures all your sources of income.

This could mean that landlords and wealthy pensioners could be massively worse off.

Tax in the UK

In 2023–24, total UK government revenue is forecast to be £1.06 trillion, or 41% of gross domestic product (GDP). The primary source of revenue is taxation, which is forecast to raise £950 billion in 2023–24, or 37% of GDP – equivalent to around £17,200 for each adult living in the UK.

Labour’s Tax Plans ……

Income Tax & National Insurance
The Labour party has pledged no national insurance or income tax rises, but they could “rebalance” these taxes lowering them for some but increasing them for others.

Lifetime Allowance
Labour have said this will be re-introduced but we don’t know the level at which it will apply. Also tax relief on pension contributions might be altered.

Tax Planning For Retirement
Inheritance tax suggests putting money in a pension, lifetime allowance suggests putting money in an isa. So it is difficult to know what to do.

State Pension

Both Labour and Conservatives are committed to the triple lock. The Conservatives will raise the personal allowance for pensioners so the state pension won’t exceed the personal allowance.

More Powers for HMRC

The supercomputer HMRC Connect tracks down a staggering amount of information, taking Big Brother surveillance to a completely new level. HMRC is now beefing it up by adding machine learning artificial intelligence (AI) technology, too. It will compare its data with the information on your tax return, and hone in on any discrepancies. This would include data held by your bank and your stockbroker. It can check all your trading activity on platforms such as eBay, Gumtree, Etsy, and Vinted.

Labour plans to spend up to £855 million to bolster the number of tax compliance officers by up to 5,000 to increase the number of investigations.

Tax on Second Homes - double council tax
The Scottish Parliament has approved powers to increase the amount of Council Tax payable on second homes by up to 100% (double Council Tax). This could be extended to England & Wales.
Taxes on Side Hustles

Starting 1st Jan 2024 eBay will pass on data to HMRC automatically if you're selling 30 or more items a year OR have total earnings over the equivalent of £1,770. eBay will automatically share this information with HMRC by 31 January 2025.

If you dispose of personal possessions for more than £3,000, you may need to pay tax on it. Have a look at Capital Gains Tax on personal possessions. If you sold stock you have purchased (even if it is secondhand), with the intention to sell online, then this is trading. If your gross turnover exceeds £1,000, then you will need to registed for self assessment as self-employed.

Dividend Tax

The dividend allowance has been lowered and people might not realise they now have to pay extra income tax

Summary

Be careful with investments in oil & gas companies and large multi-nationals. As an individual look at tax creep on dividends, come clean on your side hustles, watch for increased taxes on property investment and private pensions.

Paying tax now to have a potentially lower tax bill in the future is not a good strategy. The money leaves your pocket when it could be compounding on the stock market.

Chapters
00:00 How the Government raises taxes
00:32 Income Tax & National Insurance
00:49 HMRC connect a supercomputer that snoops on you
01:25 More powers for HMRC
01:46 Side hustle taxes
02:08 State pension
02:34 Lifetime allowance & pension tax relief
03:03 Tax planning for retirement under a Labour government
03:23 Tech Giants & Energy companies corporation tax
04:10 Capital gains tax
04:38 Inheritance tax
05:13 Tax on second homes
06:13 Dividend tax
06:38 Labour's hold manifesto
07:39 Implications of Labour's tax plans