Liberal Democrats Tax Manifesto: A Leader and his canoe

Introduction

Last, and very much least of my tax manifesto reviews is the Lib Dems.

Yes, they are still going. Bless ‘em.

Leader [checks notes] Sir Ed Davey has been countering the negative headlines he has mustered due to links with the Post Office scandal by being photographed falling out of canoes, at waterparks and on assault courses. A most unusual, medieval type of self-flagellation that seems to have largely worked out with the press.

I have already described the manifesto as like ‘miso soup’… and not because its  made from a fine stock.

But let’s see what ingredients we can strain from the insipid broth.

Tax Body Count

Tax or taxes is mentioned 37 times

Income Tax

Firstly, the Lib Dems show themselves to be crusaders against fiscal drag. They say they will “cut income tax by raising the tax-free personal allowance”.

So, they have invented the stealth tax cut.

Employment taxes

A really interesting pledge is to “end retrospective tax changes such as the loan charge brought in by the Conservatives” How great would this be? The thought is as exciting as the reality is depressing.

[This is where we take the house lights up and, Bono style, we talk to the audience about ‘issues. Back in July 2018, I spoke to Lib Dem MP Stephen Lloyd in Westminster about the loan charge and how shitty it really was. He understood it, and the Lib Dems, as a party seemed to get it. Sadly, their colleagues in larger parties rarely wanted to look beneath the bonnet]

In addition, they will review the Government’s off-payroll working IR35 reforms to ensure self-employed people are treated fairly. As you will recall, this was one of Reform’s milkshakes – sorry, policies – thought they were typically more categoric and said it would be abolished.

Modernising employment rights really does appear to be the Lib Dem wheelhouse and they suggest a range of measures to bring the ‘gig economy’ up to date.

Why was I so cruel about them? I’m sad now.

CGT

Sadly, we are back to thin soup again when it comes to CGT. We are told that they will “fairly reform capital gains tax to close loopholes exploited by the super wealthy.”

Like Oliver, when served with gruel… “Please Sir (Ed), can we have some more?”

Corporate tax

A recurring them across the manifestos is the reversal of the banking surcharge. The LibDems have also subscribed for this revenue raiser. After all, no one likes the banks.

one-off windfall tax on the super-profits of oil and gas producers and traders.

Increasing the Digital Services Tax on social media firms and other tech giants from 2% to 6%. This apes a suggestion by the father of Molly Russell, the teenager who tragically took her own life after online bullying, who suggested a windfall tax based on the social media company’s ‘digital’ pollution.

I am amazed that they did not also levy a wealth tax on the boogie man.

In addition, the Lib Dems will look to introduce a 4% tax on the share buyback schemes of FTSE-100 listed  companies. It is assumed that this mirrors the recent introduction of a 1% stock buyback in the US.

Finally, we are told that they will make a case for increasing the global minimum rate of corporation tax to 21%.

Green taxes

The Lib Dems also suggest pulling some tax levers in order to reduce the climate impact of flying by:

• Reforming how international flights are taxed to focus on those who fly the most; and
• Introducing a new super tax on private jet flights

Tax avoidance and other monkey business

Of course, the Lib Dems will give HMRC the resources it needs to properly tackle tax avoidance and evasion.

After all, the magic money tree needs to be nurtured.

Conclusion

The suggestions around abolishing the loan charge are as hard as nails.

But the rest is so, well, meh.

If the Green Party’s manifesto might be called the Badger Budget, then this is the Beige Budget.

Perhaps this explains Sir Ed’s  campaign strategy of being photographed falling into water.