In this post I will briefly discuss Reform UK’s policies on tax. Reform has a set of detailed policies on tax and the economy which can be consulted here. What I would like to do here is simply to point out some of Reform’s policies on taxation that you should know about.

Tax can be a dry subject but it is important because over-taxation is detrimental to the nation. It robs the producer of the fruits of his or her labour and acts as a disincentive to work. Richard Tice has talked about this in his recent 2023 press conference here. High levels of taxation may also be counter-productive. Economists refer to a concept known as the “Laffer Curve”, which posits that taxation beyond a certain point actually reduces the revenue obtained from taxation. When taxation is really necessary, so as to provide for effective and efficient public services, it should be simple and it should be fair.

First, income tax. Reform proposes to lift the minimum threshold (personal allowance) to £20,000 from £12,571 per annum. The less well-off benefit from this proportionately the most, saving £1,500 p.a. @£20,000 salary, circa £30 per week. Reform also proposes to lift the threshold for 40% tax to £70,000, allowing middle-income families to retain a greater proportion of the income from their labour. You will note that this differentiates Reform from the major political parties: the Conservatives, as we have seen, were itching to reduce tax for the very highest earning taxpayers, while Labour are interested in increasing tax to fund further spending. We need to reduce tax instead for the lower and middle-income earners.

Next, Reform proposes to free up 1.2 million SMEs from paying Corporation Tax (over 80% of companies) by lifting the minimum profit threshold to £100,000. We need to become a society that encourages small and medium business owners as these are the entrepreneurial dynamo that powers our economy and is the seedbed for future growth and innovation.

Reform further proposes that the cost of living should be reduced by lowering consumer taxes:

  • Scrap VAT on energy bills = saves £100 / year per household.
  • Scrap environmental levies = saves £160 / year per household.
  • Lower fuel duty by 20p / litre = saves £240 / year per driver.
  • Lower VAT from 20% to 18% = saves £300 / year per household.

And Reform also proposes to abolish Inheritance Tax for all estates under £2m (98% of all estates), and for there to be a 20% tax above £2m — executors can choose to give this to registered charities or HMRC. Inheritance tax is an especially invidious tax as it disproportionately targets ordinary people while the wealthy find ways of avoiding it. The notion that estates of ordinary men and women should pay 40% tax on value over £325,000 is unjustifiable and absurd given that the average price of a modest house in many parts of the country is likely to be well in excess of this figure.

These are just a few of Reform’s policies. I hope you will consult our policy document to see the full range of ideas we have for improving our country.

The lower taxes proposed by Reform will not be made possible through borrowing, as the Conservatives last year disastrously proposed, but through requiring government departments to reduce wasteful spending by £5 in £100, without reduction in frontline services.

The political establishment and mainstream media talk about the economy as if the whole wealth of the nation belonged to the bureaucrats, who high-handedly get to decide how much of our own income and savings we get to retain. This is upside-down. The wealth of the country belongs to the people first and foremost – and should only be taken from them by the state for clearly defined and democratically agreed purposes, and under the expectation that it will be deployed effectively and efficiently for the good of the nation of a whole. It cannot currently be said that this is being done. It is time for Reform.