Much has been written over recent weeks about the tax changes included in the manifestos of the various different political parties. Now that the outcome of the election is known, what tax changes can we expect in the months to come and when are they likely to be brought in?

No emergency budget

It seems clear that the new Labour Government will not introduce any immediate tax changes by way of an emergency budget post-election. Rachel Reeves has confirmed that we can expect the first "fiscal event" in Autumn 2024, to be followed by a Finance Bill with draft legislation. This would allow for considered input from the Office for Budget Responsibility.

No increase on income tax, national insurance contributions, VAT or corporation tax

Labour has committed to not increasing NICs or VAT (except in relation to private school fees), or the basic, higher or additional rates of income tax. Nothing has been said about the income tax and national insurance contributions thresholds (although there have been indications that the freezing of income tax thresholds until 2027-28 will be maintained). The headline rate of corporation tax will be capped at the current 25% for the next parliament but may be reduced if "tax changes in other countries pose a risk to UK competitiveness".

No comment on capital Gains Tax (CGT)

Labour has not said what it will do in relation to CGT i.e. there is no explicit mention of CGT in the manifesto.

No specific commitments on Inheritance Tax (IHT)

Other than making changes to how IHT works in the context of Non-Doms (see below), Labour has not made specific commitments regarding IHT. The prospect of an actual (new) wealth tax was rejected by Rachel Reeves in August 2023, but there have been more recent indications that some developments in capital taxes are under consideration.

The "Non-Doms" regime is to be changed

Abolition of the favourable regime for UK resident, but non-UK domiciled, individuals has been a Labour pledge for some time – this is considered in more detail in our blog.

VAT on private school fees to be introduced

The Labour Party's intention to introduce a VAT charge on private school fees was widely trailed before the election and was much debated during the election campaign. However in a speech to the Times CEO Summit, Rachel Reeves indicated that the new VAT treatment is unlikely to take effect until 2025 at the earliest, and would not be retrospective. This is because it would not make sense to impose increased fees from September 2024, or to introduce changes part-way through the school year. Introducing the VAT charge isn’t entirely straightforward - the treatment of boarding fees, uniform and equipment also needs to be considered, as well as transitional rules for the recovery of input VAT already incurred, which schools were not previously able to recover.

Private schools to pay business rates

Alongside the introduction of VAT on private school fees, Labour proposes to remove the current exemption from business rates for private schools in England so that private schools will have to pay business rates. Private schools in Scotland are already subject to business rates; that change was introduced with effect from 1 April 2022.

Carried interest to be taxed at income tax rates

Investment fund managers in private equity funds currently receive a share in the profits of the funds they manage by way of so-called "carried interest". The profits arising when carried interest is paid out are currently taxed at CGT rates of 28%, rather than being subject to income tax and national insurance contributions.

The Labour Party manifesto stated that "Private equity is the only industry where performance-related pay is treated as capital gains. Labour will close this loophole". It is understood that the new Government will consult on the proposals to change the tax treatment of carried interest. Rachel Reeves also suggested in an interview with the Financial Times [on 18 June 2024] that where fund managers are putting their own capital at risk, the favourable tax treatment could continue.

Energy Profits Levy to be increased and extended

The Energy Profits Levy is a windfall tax on the profits of oil and gas companies. Labour is proposing to increase the Energy Profits Levy by 3%, giving an effective rate of 78% for affected companies, and to extend the end date of the levy to the end of the next parliament.

Non-domestic (business) rates in England to be replaced

The Labour manifesto states that "The current business rates system disincentivises investment, creates uncertainty and places  an undue burden on our high streets", and proposes to replace business rates in England with a system that will, it states, level the playing field between the high street and online commerce. Business rates are devolved to Scotland, and have recently been amended in line with the recommendations of the Barclay Review, so a change to business rates in England will not necessarily be followed by a change in Scotland.

Stamp Duty Land Tax (SDLT)

Overseas purchasers of residential property in England and Northern Ireland currently pay a surcharge of 2%, and Labour proposes to increase this to 3%.

This change will not affect house buyers in Scotland, where the Land and Buildings Transaction Tax is payable instead of SDLT. There is no LBTT surcharge for overseas purchasers buying residential property in Scotland, although the rate of the additional dwelling supplement in Scotland is 6%, compared to 3% in England and Wales.


Isobel d'Inverno

Director of Corporate Tax

Alan Barr


Neil Ritchie

Director of Personal Tax

Kevin Winters


Caitlin Wright