Conservative and Labour reveal election taxation plans

The Conservative Party has said that it will exempt all properties worth less than £1 million from inheritance tax, should it win the next election.

Chancellor George Osborne said that the move will support our basic human need to provide for our children. It will mean that more homeowners are able to pass their homes on to their children without paying tax.

The Labour party said that the Conservatives have made similar promises before and failed to deliver. Deputy leader, Harriet Harman, said that as the election approaches, it was becoming clearer that the Conservatives stood to benefit the well off, whereas Labour wanted everyone to be better off.

Independent economists said that raising the level at which properties qualify for inheritance tax in this way will disproportionately benefit the wealthy and push up property prices still further.

The Labour Party has said that it will raise £7.5 billion by fining tax avoiders and closing tax loopholes should it win the coming general election. Shadow Chancellor, Ed Balls, said that his party will carry out an immediate review of tax collection in order to close all existing loopholes, if Labour wins the election in May. They promised to increase and strengthen HM Revenue and Customs’ powers to collect taxes. They will also change rules that enable private equity managers to avoid income tax and hedge funds to sidestep stamp duty.

The Conservatives have said that they will raise £5 billion from tax avoiders but have not yet said how this will be done.

Director of Institute for Fiscal Studies, Paul Johnson, said that both parties are guilty of making up numbers. Neither party can actually know how much money can be raised by cracking down on tax evasion, he added.

Big banks losing customers under new switching system

Many of the big high street banks are losing customers who are switching current accounts, according to recent figures from The Payments’ Council.

More and more bank customers are moving their current accounts away from the UK’s biggest banks, following changes to the switching system.

It now takes only seven days to switch bank accounts, compared to the thirty days it previously took. All regular standing orders and direct debits are automatically switched over to the new account. Payments that are accidentally requested from or made to the old account are also automatically transferred to the new one, for a period of three years.

The banks recording the largest loss of customers were HSBC, RBS, Nat West, Barclays and Lloyds Bank.

Halifax, Nationwide Building Society, Tesco Bank and Santander, however, gained customers following the introduction of the seven day switching process.

The Payments’ Council has overseen the introduction of the faster switching service and has said that 1.14 million customers changed banks during the past year, a 7 per cent year on year rise.

Andrew Hagger, of Money Comms, said that although the figures show that a number of people are being tempted by the deals many of the banks are offering, the vast majority are staying with their existing providers and ignoring the cash enticements of other banks. Hagger added that this is no doubt because of the confusing number of varying tariffs, interest rates, rewards, charges and cashback deals available. Customers are struggling to work out which current account really offers them best value for money.

The Payments Council is a regulatory body that represents the UK payments industry. It is due to be replaced by the Payment Systems Regulator during the summer of this year.