Labour have today (Sunday) outlined their ‘emergency support’ to
help businesses with rising costs. The measures include a tax cut
which would take effect this week if the Government adopted
Labour’s plans.
Under Labour’s plans a typical small factory or
workshop would save £2,700, a pub would be £2,600 better off and
the average café or restaurant would save £2,700.
New analysis from Labour shows the current system of business
rates is acting as a tax on growth, with smaller firms facing big
tax cliff edges if they expand. A typical hairdresser
who expands from one to two sites would see their
tax bill go from £0
to £5,000, while an average shop goes from
paying £0 to £10,000.
Labour’s long-term plan would see Business Rates
scrapped and replaced with a system that
supported growth, and would be fairer between the small
high street businesses based on bricks and the global
tech giants based on clicks.
Labour have also pledged support to British industry with an
energy support fund to help with rising prices. The
Government promised to support energy intensive firms six months
ago but have failed to come forward with a package of support.
Labour’s plans include direct help for industry to deal with
rising prices now as well as support for the steel industry
to decarbonise.
Labours plan includes:
-
A tax cut for small business
Labour would cut taxes for businesses by raising the
threshold for small business rates relief for a
year (from the current threshold of £15,000 to £25,000), to
give SMEs a discount on their business rates bill from
1st April 2022/23.
Labour’s energy support fund would prioritise energy-intensive
industries such as steel, glass and ceramics to bring down their
energy bills. At least 388,000 jobs are at risk if these
factories are forced to close or reduce operations as the price
of gas has nearly tripled since last October.
Labour would support the steel industry to decarbonise, with £3bn
worth of investment in collaboration with business, over the
coming decade.
-
No rise in National
Insurance
Labour would not be increasing national insurance contributions
which will mean employers will pay an additional rate of 1.25% on
employees’ earnings over £175 per week (£9,100 per year) from the
1st April.
, Labour’s Shadow
Business Secretary, commenting on the emergency
measures, said:
“Businesses are facing a tidal wave of extra costs and being held
back under the Conservatives through tax rises, inflation and the
energy crisis. Action is needed now to ensure firms remain viable
and extra costs aren’t passed onto consumers worsening the
cost-of-living crisis.
“Under Labour small firms would be around £2,000 better off from
this week through our plans to cut taxes and we wouldn’t penalise
small firms for expanding. Labour would back industry with our
energy support fund and long-term plans to green the steel
industry.
“It’s clear great British businesses can’t afford this
Government.”
Ends
Notes to editors
-
https://www.telegraph.co.uk/news/2022/04/02/business-rates-must-lowered-help-tackle-cost-living-crisis-urges/
- Labour called for the threshold for
Small Business Rates Relief to rise to £25,000 for a year
from this April, with relief operating on a sliding scale from
£12,000 to £25,000 as with the current system. Based on the
average rateable value of pubs, restaurants and small factories,
they would pay £2,600, £2,700 and £2,7000 less in business rates
this year respectively. This would be paid for by increasing
the rate of Digital Services Tax, levied on the revenues of tech
giants who have done very well over the pandemic, to 12 per cent
for 2022/23, raising £2.1bn. The Digital Services Tax is expected
to replaced after 2022/23 by a global system of corporate
taxation.
https://www.gov.uk/government/statistics/non-domestic-rating-stock-of-properties-including-business-floorspace-2021
- Labour has called for a support
fund to help energy intensive industries with rising costs. This
would be paid for out of the revenue generated by a windfall tax
on oil and gas producer profits.
https://www.bbc.co.uk/news/business-59930932
