SNP aims to review MTD and IR35
Digging beneath the main goals of leaving one Union and staying in another, the SNP has some radical ideas to reform NIC and VAT, and to review the implementation of the loan charge, IR35 and digitisation of the tax system.
Although the SNP’s election manifesto is headlined “Stronger for Scotland”, at its launch Nicola Sturgeon stood in front of a sign comprising just two words “Stop Brexit”. The SNP is also keen to end austerity and reverse what it describes as Westminster’s broken promises.
Beyond this, there is a desire to protect the NHS, reverse Westminster cuts to the Scottish budget, help with the cost of living, protect the environment (seeking Scottish carbon neutrality by 2040) and support pensioners.
The SNP also intends to give the Scottish Parliament full control of tax and social security policy, which will make life interesting for those who need to write tax software.
The SNP is requesting that fees for EU citizens applying for settled status should be scrapped. This would help both those seeking work in the UK and employers looking to recruit or retain workers with an EU background.
Workers’ rights and remuneration
The SNP is looking to extend parental leave, stop young people being exploited through unpaid trial shifts and outlaw “exploitative zero-hour contracts”.
It will also press for the statutory living wage to rise to at least the level of the real living wage. This will be accompanied by tougher action to close the gender pay gap, introducing fines for businesses that do not meet an agreed equal pay standard.
The SNP would also argue for greater representation of women and minority communities on both public and private sector boards, with the goal of a 50-50 gender balance.
There is also a demand for the application of employment rights to those in the gig economy, agency workers and those on zero-hours contracts or in insecure work.
Executive pension contributions would have to be the same as those for workers, and in considering senior pay packages, companies would be obliged to consider the balance of all employees’ salaries.
As the manifesto highlights, the average income tax bill in Scotland is already less than in the rest of the UK, as those on low incomes pay less tax whilst those who can afford it pay more.
The main proposals include:
- Review the closure of HMRC offices in Scotland and across the UK
- Reform company law, to uncover the beneficial ownership of Scottish limited partnerships, other companies and trusts
- Improve the transparency of tax paid by international companies to ensure that they make a proportionate contribution to tax revenues
- Work with other countries to address the tax challenges from the digitalisation of the economy
- Support further action by the UK government to tackle international tax avoidance
- Implement the 5th anti-money laundering directive in full
- Impose an online retailer tax
- Review IR35 tax rules around intermediaries
- Review problems with the implementation of the loan charge
- Transfer control of National Insurance to Scotland, to allow NIC rates and thresholds to match the Scottish income tax rates
- Double the employment allowance from £3,000 to £6,000
- Reform VAT, seeking the continuation of exemption on essential items including children’s clothes, remove VAT from women’s sanitary products, e-books and e-journals and additionally seek a reduction in VAT rates for the hospitality sector
- Undertake a comprehensive inquiry into MTD and the tax payments system
- Freeze insurance premium tax rates
- Abolish the so-called “bedroom tax”
- Oppose any trade talks with the US until they drop the new tariffs on Scotch whisky.
The party is also seeking a £175m refund in connection with a UK government climbdown relating to VAT on Scotland’s police and fire services.
In addition to its own reforms, SNP MPs will campaign for changes to the UK tax system to promote green policies. These will include:
- Tax incentives to facilitate switching to low-carbon heating systems.
- Re-design of vehicle and tax incentives to support industry and business investment in zero-emission and sustainable transport choices. Examples of this include reduced VAT on bicycles and additional incentives for businesses and individuals to use ultra-low emission vehicles.
- Reduce VAT rates on energy efficiency improvements in homes.
- Drop plans to increase VAT from 5% to 20% on the installation of solar panels on homes.
The SNP will oppose any increase in the state pension age beyond 67 and maintain the triple lock on the state pension. It will also support women who have been disadvantaged as a result of pension age changes.
It will also campaign for the retention of free TV licences for all over 75s, which must be administered by the UK government.
It will call on the UK government to extend auto enrolment in workplace pensions to the low paid and ensure self-employed workers can benefit from regular pension savings;
The SNP proposals include:
- Increase in paid maternity leave to one year
- Set maternity pay at 100% of average weekly earnings for 12 weeks then 90% of pay for 40 weeks or £150, whichever is lower
- Increase the shared parental leave to 64 weeks, of which at least 12 weeks must be taken by the father.
While the SNP only contests parliamentary seats in Scotland, it was the third-biggest party at the last election and, if there is a hung parliament, is likely to hold the balance of power and have an influential say on future government policy.
Although the party’s main goals are to stop Brexit and obtain independence from the United Kingdom, there are also numerous plans around taxation and workers’ rights that might well be implemented if Nicola Sturgeon finds herself in a position of influence after the election.