As you are no doubt aware, the Labour Party has succeeded in ousting the Tories from Parliament with a significant majority.

After 14 years of Conservative Party administration, British businesses are now bracing themselves for a radically different attitude to the economy and social policies.

Much has been said on the matter – both by economists and the commentariat – but what matters to you is the key question: “What’s going to happen to my finances now?”

It’s a tough question to answer, especially as Labour has only been in place for a short while, but we’ve scoured their manifesto and comments to try to piece together a prediction for the future.

Here’s what we’ve found…

Taxes and National Insurance

Labour’s 2024 manifesto promised not to raise National Insurance, VAT, or Income Tax rates.

However, you might still face a higher Income Tax burden due to the Conservative’s freeze on the Personal Allowance and tax thresholds.

Whether Labour make changes to this is yet to be seen but we feel their unlikely to amend the current policy.

Stamp Duty, Capital Gains Tax (CGT), and Inheritance Tax are areas where Labour has provided few assurances either.

While ruling out CGT on primary residences, other adjustments in these taxes are certainly on the cards.

Sir Keir Starmer, our new Prime Minister, has mentioned that the temporary Stamp Duty threshold increase for first-time buyers will revert to £300,000 (from £425,000) in April 2025.

Rachel Reeves has also suggested she might introduce measures to address tax system fairness, such as:

• Ending offshore trusts to avoid Inheritance Tax.
• Removing VAT exemption and business rate relief for private schools, with the revenue used to train more teachers.
• Abolishing non-dom status in favour of a scheme for short-term residents.

Labour may also implement the “UK Individual Savings Account (ISA)” to boost investment in the UK economy.

As you can see, the tax waters are somewhat muddy, but it’s probably a safe bet that your taxes will increase over the next few years – unfortunately.

It’s worth noting that Labour could benefit from a potential interest rate cut by the Bank of England (BoE) as inflation meets the BoE’s two per cent target.

This would reduce borrowing costs for those with tracker or variable-rate mortgages, and fixed-rate holders might find better deals upon renewal.

Labour’s housing targets

The Labour Party has said it aims to build 1.5 million homes over five years to address housing shortages. Plans include:

• Funding more council planning officers.
• Reviewing green belt boundaries to prioritise brownfield and “grey belt” land.
• Allowing local authorities to allocate more green belt land for housing.
• Reintroducing mandatory local housing targets.
• Publishing new design codes for better property quality.

Labour also plans to help young people get on the property ladder by giving them priority in new housing developments and introducing a permanent Freedom to Buy mortgage guarantee scheme to support 80,000 young buyers over five years.

State Pension and pension reforms

Labour has said it will maintain the State Pension triple lock until at least 2030, ensuring annual increases based on inflation, average wage growth, or 2.5 per cent, whichever is highest.

Labour will not reintroduce the pension Lifetime Allowance (LTA), providing certainty for savers and avoiding the complexities of reinstating former rules.

They promise to review the private pension system for better outcomes, with reforms expected after the 2025/26 tax year.

They are also talking about increasing UK investment by allowing workplace pension schemes to consolidate and scale effectively.

Perhaps the most politically divisive comments come from the party’s senior tax adviser who has suggested introducing ‘means tested state pensions.’

In other words, despite having paid into the scheme for your entire working life, if you are deemed over the threshold, you could lose all rights to your state pension.

Luckily, the complexity and sheer unpopularity of the idea has caused many to suggest the idea would never actually be implemented.

Employee rights and minimum wage

For business owners, Labour’s “new deal for working people” includes:

• Banning zero-hours contracts.
• Ending “fire and rehire” practices.
• Introducing parental leave, sick pay, and unfair dismissal rights from day one of employment.

Labour also plans to reform the minimum wage to a “genuine living wage” and remove age bands, potentially raising salary costs for businesses employing younger workers.

It is unclear if this would apply to over-16s or over-18s but either way could increase your employment expenses considerably.

Autumn Budget and fiscal events

Rachel Reeves has indicated that Labour will not deliver a Budget without Office for Budget Responsibility (OBR) forecasts, typically requiring about 10 weeks.

Therefore, the earliest possible Budget date is mid-September, with October or November being more realistic.

Labour has committed to one major fiscal event per year, allowing families and businesses time to plan for tax and spending policies.

We feel this is a positive move as multiple budgets, statements and major events can cause a great deal of uncertainty, especially for businesses.