Page last updated at 09:17 GMT, Tuesday, 11 November 2008

At-a-glance: Party tax cut policy

With speculation tax cut plans are set to be announced, where do the main parties currently stand on the issue?

LABOUR
Income tax: A 2p cut in the basic rate of income tax came into effect in April at the same time as the 10p income tax band was abolished. After a political row over lower earners left worse off by the changes Chancellor Alistair Darling raised the personal tax allowance by 600 for basic rate taxpayers for one-year only. In September 22 million people got a 60 tax bill rebate and will get 10 extra a month until the end of the financial year.

Fuel duty: In July it was announced that a planned 2p-a-litre increase in fuel duty was being postponed from October to at least March.

Stamp duty: In September ministers raised the threshold at which home buyers pay stamp duty from 125,000 to 175,000, for 12 months only, to try to boost the housing market.

Inheritance tax: The threshold at which people pay it was raised for married couples in October 2007 - a month after the Conservatives unveiled their inheritance tax policy. Previously charged at 40% on all assets worth more than 300,000, married couples were allowed to combine their allowance giving them a combined threshold of 600,000.

New cuts? There have been reports the government is considering tax cuts as part of a package to boost the economy and to help people through the expected recession. Speculation has focused on targeted cuts - possibly using tax credits. A possible temporary 5% cut in VAT and the abolition of stamp duty have also featured in press speculation. Gordon Brown says any announcements are a matter for the pre-Budget report, which is expected next week.


CONSERVATIVES

Stamp duty: The Conservatives have said they would scrap stamp duty entirely on properties worth 250,000 or less.

Inheritance tax: They have pledged to raise the threshold at which people pay inheritance tax to 1m.

Business taxes: They would also reduce corporation tax from 28p to 25p - paid for by removing reliefs and reducing capital allowances - while the small companies' tax rate would be kept at 20p and they would be allowed to defer VAT payments for six months.

Council tax: They have said they would encourage a two-year freeze on English council tax bills by helping councils which limit rises.

New pledge: A cut in the amount companies pay in national insurance if they take on staff who have been jobless for three months. David Cameron says the scheme would be self financing as it would use cash that would have been spent on unemployment benefit. He says the government should act early to prevent unemployment soaring. It would create 350,000 jobs and cut firms' tax burden by 2.6bn, the Conservatives say. The party says it favours lower taxes in principle, but oppose "unfunded" tax cuts. He has pledged further proposals to ease the pain of a recession.

LIBERAL DEMOCRATS

Income tax: The Liberal Democrats say they would reduce the basic rate of income tax from 20p to 16p. They have said they will find the money through closing "tax loopholes" that benefit the rich, cracking down on tax avoidance, which the Lib Dems say costs several billion a year, and introducing green taxes. Anyone paying the higher rate of tax would also lose their higher rate tax relief on pension contributions - something Nick Clegg says costs 8bn.

Council tax: The party has pledged to abolish council tax and replace it with a local income tax - so the amount paid would vary according in a person's income rather than the value of their home.

New pledges? The party has pledged to cut about 20bn from public spending. They say some of it would be spent on other priorities and some used to cut taxes. Party leader Nick Clegg says the tax system should be "rebalanced" to make it fairer and "big tax cuts" are needed. He may give more details in a speech on Tuesday.

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SEE ALSO
Tories pledge council tax freeze
29 Sep 08 |  UK Politics
Lib Dems approve income tax cuts
15 Sep 08 |  UK Politics
Stamp duty axed below 175,000
02 Sep 08 |  UK Politics
Brown defends fuel duty decision
16 Jul 08 |  UK Politics
Tories urge corporation tax cut
09 Mar 08 |  UK Politics
Inheritance tax threshold raised
09 Oct 07 |  Business
Tories would cut inheritance tax
01 Oct 07 |  UK Politics
Brown cuts basic tax rate by 2p
21 Mar 07 |  UK Politics
Lib Dems plan 4p cut in tax rate
12 Jul 07 |  UK Politics


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