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Reform UK Unveils ‘Radical’ Policy Wishlist to Challenge Labour

Published by Prerana
Posted Date: June 22, 2024 , Modified Date: June 24, 2024

Nigel Farage's party, Reform UK, has announced an ambitious set of plans to change the UK's economy and politics. Although they know they may not have many MPs in the next parliament, Reform UK aims to become a strong opposition to the Labour Party. They have proposed a new contract that includes substantial changes to taxes and the public sector.

How Will the Tax Changes Affect Workers and Businesses?

Reform UK has proposed a plan to increase the starting Income Tax threshold from £12,570 to £20,000. This would benefit low-paid workers by potentially saving them £1,500 per year and removing seven million people from the Income Tax bracket. The goal is to encourage work and reduce the reliance on benefits, ultimately aiming to help one million people move off welfare.

The plan also includes raising the higher rate Income Tax threshold from £50,271 to £70,000. However, the 20% and 40% tax rates themselves would remain unchanged. Additionally, the proposal involves providing a three-year exemption from basic rate tax to all frontline NHS and social care staff to address staffing shortages and encourage former employees to return to the sector.

Reform UK also suggests significant changes to employer national insurance contributions, with the rate being raised to 20% for foreign workers but maintained at the current 13.8% rate for British citizens. This policy aims to generate £4 billion annually and encourage the employment of British workers, exempting essential foreign health and care workers and small businesses from the increased rate.

What Are the Proposed Reforms for the Public Sector and Economy?

Reform UK plans to make the public sector more efficient, aiming to save £50 billion by reducing waste and increasing productivity. Richard Tice, a leading figure in the party, highlighted the need to decrease the size of the government workforce, pointing out an increase of 600,000 public sector employees since 2016.

tax changes reform uk

The party also wants to address the high costs of the current quantitative easing (QE) system. By eliminating the government's obligation to pay interest to the Bank of England for covering commercial banks on QE reserves, Reform UK believes it can save £35 billion annually.

Reform UK aims to improve HMRC's efficiency and staffing to combat tax avoidance, which will help uncover billions in unpaid taxes and reduce the tax burden on British workers. Their key tax proposals include raising the Inheritance Tax threshold to £2 million, lowering the rate from 40% to 20%, and adjusting the Stamp Duty Land Tax (SDLT) thresholds to support property transactions.

Additionally, Reform UK plans to abolish business rates for small high-street businesses, while imposing a 4% online delivery tax on large multinationals to offset the cost. They also intend to progressively reduce the main Corporation Tax rate, aiming for 15% by the third year of their government.

Conclusion

Reform UK has proposed sweeping policy changes that aim to bring about significant economic and political reform. These proposals challenge the established norms set by both Labour and Conservative governments. The party is focusing on tax cuts, improving efficiency in the public sector, and creating incentives for British workers and businesses. The feasibility of funding these proposals is still uncertain, but the party's emphasis on these key areas aims to address widespread dissatisfaction with current government policies.

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