At the 2024 General Election, both Labour and the Conservatives promised not to raise the major taxes (income tax, VAT and NIC) and to maintain the Triple Lock. I wrote about this in June 2024 (‘Self’s assessment: fiscal straitjackets’, Tax Journal, 19 June 2024) and noted that ‘the specific promises by the two major parties are relatively modest, compared to total tax receipts of around £700bn’.
Reform UK, as a relatively new challenger party, had no such qualms. Their manifesto promised some £90bn of tax cuts, of which the most expensive was a promise to raise the income tax threshold to £20,000. They also proposed a cut in corporation tax to 15%, and raising the inheritance tax threshold to £2m. There were also proposals about reducing the tax burden on NHS workers but increasing NICs on foreign workers, as well as a much-increased tax allowance on marriage. The CIOT summarised the proposals here.
Reform UK then performed probably better than they had expected at the General Election, and are now polling at similar or higher levels to both Labour and the Conservatives. Whether this will continue for the next four years, or translate into a majority at the next General Election in 2029 (or possibly 2028) remains to be seen. However, their tax policies are likely to come under increased scrutiny as the likelihood of their forming a Government increases.
Their current policies, set out in Our contract with you (bit.ly/ReformPolicies), are self-described as a ‘serious plan’. The key tax policy (listed as one of the five ‘core pledges’) is to lift the personal allowance to £20,000, summarised as:
‘Lift the income tax starting threshold to £20k to save the lowest paid £1,500 per year. This takes 7 million of the least well-off out of Income Tax to make work pay and get people off benefits.’
The saving of £1,500 is the difference between the current threshold (£12,570) and the proposed £20,000, at 20%. So it is true that someone earning a relatively low wage of £20,000 to £30,000 would indeed see a benefit of £1,500, which would be significant in relation to their take home pay. However, Reform has also proposed raising the higher rate threshold to £70,000, which would mean that a disproportionate share of the total benefits would accrue to the highest earners, as Sky News pointed out (22 June 2024). While the basic rate promise is highlighted as a core pledge, the higher rate one is in somewhat smaller type on page 7 of their Our contact with you document.
There are a number of other promised tax cuts, including a cut in fuel duty by 20p, abolishing IR35, cutting corporation tax to 20% and then 15%, and significantly reducing stamp duty. The inheritance tax threshold would be raised to £2m, with a 20% rate above that, and the VAT threshold will be raised to £150,000 to ‘free up small entrepreneurs from red tape’.
On 23 June 2025, Reform UK announced a new policy: the ‘Britannia card’. In exchange for an entry fee of £250,000, non-doms would have a 10 year exemption from UK tax (including IHT) on overseas income and assets. Superficially, this sounds similar to the pre-2017 annual fee, set at £30,000 after seven years and £60,000 after nine years. However, the Reform policy would be much cheaper for wealthy non-doms than the current Labour proposals, while deterring high-earning professionals who would no longer benefit from a four year initial remittance basis. The BBC has summarised the proposals here and Dan Neidle of Tax Policy associates has analysed the £34bn gap in Reform’s figures here.
The proposals have had widespread media coverage, but while many have pointed out the technical flaws, The Guardian (24 June 2025) has highlighted that the promise to redistribute the sums raised to the lowest-earning workers is a brilliant piece of Robin Hood style rhetoric, although I suspect that identifying ‘the bottom 10% of full time working Britons’ and paying them within 90 days of the end of the tax year will not be simple.
Reform UK’s tax promises therefore look enticing (rather like ‘£350m a week for the NHS’ on the side of a bus), but the big question is how it would be paid for. The policy document has a summary of costings at the end, which promises that everything will balance out: overall, there are £150bn of ‘potential savings’, plus a further £10bn which will be generated from assumed economic growth, which will more than pay for the £141bn of costs. However, the costs are concrete, while the savings are assumed to be possible.
Within the costs, by far the highest number is in relation to personal tax, with the £20,000 personal allowance probably accounting for at least £55bn of the total. In contrast, the policy of the previous Government of freezing allowances (which has been quietly continued by the current Labour Government) has raised significant sums. In 2023, the OBR calculated that it would be equivalent to a 4p rise in income tax and raise around £29bn a year by 2027/28. A detailed Parliamentary Briefing (Fiscal drag: an explainer, January 2025) notes that the OBR’s latest estimate is that £38.6bn will be raised by 2029/30. This has probably been the most successful tax-raising measure of recent years, not least because most people do not fully appreciate how much it is costing them.
The recent spending review allocated significant extra amounts to the NHS and defence, as well as promising a boost to capital expenditure, but a number of departments are facing frozen or falling budgets, as the IFS summarised in its initial response to the 2025 spending review. In contrast, Reform UK assumes £91bn of savings by reducing ‘wasteful government spending’. While £6bn of that is a quantifiable amount from reducing overseas aid, the remainder comes from general efficiencies of £50bn and £35bn from a policy to ‘stop bank interest on QE reserves’. This last figure is a technical measure whose calculation has been challenged by Dan Neidle, who calculates that it is overstated by at least £15bn.
Helen Miller, of the IFS, summed it up by warning that we need much more detail about ‘the big cuts to spending on public services that would be needed for the plan to be implementable’.
In summary, Reform UK’s proposed tax cuts are likely to look very attractive to potential voters, but there is a risk that the spending cuts to pay for them will have no more detail than can be contained on the back of Nigel Farage’s fag packet.
At the 2024 General Election, both Labour and the Conservatives promised not to raise the major taxes (income tax, VAT and NIC) and to maintain the Triple Lock. I wrote about this in June 2024 (‘Self’s assessment: fiscal straitjackets’, Tax Journal, 19 June 2024) and noted that ‘the specific promises by the two major parties are relatively modest, compared to total tax receipts of around £700bn’.
Reform UK, as a relatively new challenger party, had no such qualms. Their manifesto promised some £90bn of tax cuts, of which the most expensive was a promise to raise the income tax threshold to £20,000. They also proposed a cut in corporation tax to 15%, and raising the inheritance tax threshold to £2m. There were also proposals about reducing the tax burden on NHS workers but increasing NICs on foreign workers, as well as a much-increased tax allowance on marriage. The CIOT summarised the proposals here.
Reform UK then performed probably better than they had expected at the General Election, and are now polling at similar or higher levels to both Labour and the Conservatives. Whether this will continue for the next four years, or translate into a majority at the next General Election in 2029 (or possibly 2028) remains to be seen. However, their tax policies are likely to come under increased scrutiny as the likelihood of their forming a Government increases.
Their current policies, set out in Our contract with you (bit.ly/ReformPolicies), are self-described as a ‘serious plan’. The key tax policy (listed as one of the five ‘core pledges’) is to lift the personal allowance to £20,000, summarised as:
‘Lift the income tax starting threshold to £20k to save the lowest paid £1,500 per year. This takes 7 million of the least well-off out of Income Tax to make work pay and get people off benefits.’
The saving of £1,500 is the difference between the current threshold (£12,570) and the proposed £20,000, at 20%. So it is true that someone earning a relatively low wage of £20,000 to £30,000 would indeed see a benefit of £1,500, which would be significant in relation to their take home pay. However, Reform has also proposed raising the higher rate threshold to £70,000, which would mean that a disproportionate share of the total benefits would accrue to the highest earners, as Sky News pointed out (22 June 2024). While the basic rate promise is highlighted as a core pledge, the higher rate one is in somewhat smaller type on page 7 of their Our contact with you document.
There are a number of other promised tax cuts, including a cut in fuel duty by 20p, abolishing IR35, cutting corporation tax to 20% and then 15%, and significantly reducing stamp duty. The inheritance tax threshold would be raised to £2m, with a 20% rate above that, and the VAT threshold will be raised to £150,000 to ‘free up small entrepreneurs from red tape’.
On 23 June 2025, Reform UK announced a new policy: the ‘Britannia card’. In exchange for an entry fee of £250,000, non-doms would have a 10 year exemption from UK tax (including IHT) on overseas income and assets. Superficially, this sounds similar to the pre-2017 annual fee, set at £30,000 after seven years and £60,000 after nine years. However, the Reform policy would be much cheaper for wealthy non-doms than the current Labour proposals, while deterring high-earning professionals who would no longer benefit from a four year initial remittance basis. The BBC has summarised the proposals here and Dan Neidle of Tax Policy associates has analysed the £34bn gap in Reform’s figures here.
The proposals have had widespread media coverage, but while many have pointed out the technical flaws, The Guardian (24 June 2025) has highlighted that the promise to redistribute the sums raised to the lowest-earning workers is a brilliant piece of Robin Hood style rhetoric, although I suspect that identifying ‘the bottom 10% of full time working Britons’ and paying them within 90 days of the end of the tax year will not be simple.
Reform UK’s tax promises therefore look enticing (rather like ‘£350m a week for the NHS’ on the side of a bus), but the big question is how it would be paid for. The policy document has a summary of costings at the end, which promises that everything will balance out: overall, there are £150bn of ‘potential savings’, plus a further £10bn which will be generated from assumed economic growth, which will more than pay for the £141bn of costs. However, the costs are concrete, while the savings are assumed to be possible.
Within the costs, by far the highest number is in relation to personal tax, with the £20,000 personal allowance probably accounting for at least £55bn of the total. In contrast, the policy of the previous Government of freezing allowances (which has been quietly continued by the current Labour Government) has raised significant sums. In 2023, the OBR calculated that it would be equivalent to a 4p rise in income tax and raise around £29bn a year by 2027/28. A detailed Parliamentary Briefing (Fiscal drag: an explainer, January 2025) notes that the OBR’s latest estimate is that £38.6bn will be raised by 2029/30. This has probably been the most successful tax-raising measure of recent years, not least because most people do not fully appreciate how much it is costing them.
The recent spending review allocated significant extra amounts to the NHS and defence, as well as promising a boost to capital expenditure, but a number of departments are facing frozen or falling budgets, as the IFS summarised in its initial response to the 2025 spending review. In contrast, Reform UK assumes £91bn of savings by reducing ‘wasteful government spending’. While £6bn of that is a quantifiable amount from reducing overseas aid, the remainder comes from general efficiencies of £50bn and £35bn from a policy to ‘stop bank interest on QE reserves’. This last figure is a technical measure whose calculation has been challenged by Dan Neidle, who calculates that it is overstated by at least £15bn.
Helen Miller, of the IFS, summed it up by warning that we need much more detail about ‘the big cuts to spending on public services that would be needed for the plan to be implementable’.
In summary, Reform UK’s proposed tax cuts are likely to look very attractive to potential voters, but there is a risk that the spending cuts to pay for them will have no more detail than can be contained on the back of Nigel Farage’s fag packet.
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