Shadow Chancellor tells Labour: don’t raise taxes - back small business and the self-employed
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In his first major speech today [Thursday 17 September], Shadow
Chancellor Andrew Griffith will warn Andy Burnham and John Healey
against raising taxes at the Budget in October and urge them to
instead commit to backing small businesses and the self-employed.
Griffith will also announce the appointment of new advisors
to the Shadow Chancellor's office tasked with identifying and
stripping out the tax red tape that holds back Britain's small
businesses and sole traders....Request free trial
In his first major speech today [Thursday 17 September], Shadow Chancellor Andrew Griffith will warn Andy Burnham and John Healey against raising taxes at the Budget in October and urge them to instead commit to backing small businesses and the self-employed. Griffith will also announce the appointment of new advisors to the Shadow Chancellor's office tasked with identifying and stripping out the tax red tape that holds back Britain's small businesses and sole traders. In the speech, delivered to students, staff and local business owners at Capital City College Group in London, Griffith will say that small businesses are taxed too highly and the cost of complying with the tax system has become a tax in its own right. He will warn the Chancellor John Healey that after Rachel Reeves' two disastrous tax-raising budgets, Britain cannot afford any more of the same. Just this week, former Bank of England economist and key Andy Burnham ally Andy Haldane warned the Prime Minister not to raise taxes, saying that the markets fear his is a traditional tax and spend socialist government with better TikTok videos and that Labour's Achilles' heel has been its unwillingness and/or inability to cut public spending. And last week, former chief economist for Goldman Sachs and another key Burnham ally, Lord Jim O'Neill, warned that raising taxes on businesses would damage the economy. Their comments come as fears grow about rising bond costs, and rumours swirl that Labour could implement a new oil and gas tax and launch a tax raid on the city, driving up bills and causing further damage to industry. On top of the costs from Labour's tax hikes, businesses also face the burden of navigating an incredibly complex tax system. A corporation tax return now contains 985 separate boxes, and HMRC's own model identifies around 2,500 obligations on businesses across 27 different areas of tax policy. The Federation of Small Businesses estimates that tax compliance costs the small business community £25 billion a year, and that the average small business spends 44 hours a year on tax administration, the equivalent of more than a full working week. HMRC puts the cost to business of complying with the tax system at £15.4 billion a year. The National Audit Office has found that the research underlying that figure has not been updated since 2015 and does not take account of Making Tax Digital at all. This is unsustainable. Griffith has appointed Lord Mackinlay of Richborough, also known as 'the Bionic Lord', who qualified as a chartered accountant and chartered tax adviser, and Robert Colvile, the outgoing Director of the Centre for Policy Studies. They will produce a report taking evidence from small business and self-employed organisations. While they will have a wide remit, they will consider in particular these key questions, and report in December:
Griffith will also call on the Chancellor to use the Budget on 28 October to pause the planned extension of Making Tax Digital for Income Tax, which is due to pull in sole traders and landlords earning over £30,000 from April 2027 and over £20,000 from April 2028. Since 1 September, HMRC has begun enrolling eligible taxpayers into the regime without their agreement, writing to inform them that they have already been signed up. Andrew Griffith MP, Shadow Chancellor of the Exchequer, said: Labour are squeezing small businesses dry. They are taxing them too much and crushing them with a complex tax system that is working against them. Labour's Jobs Tax and business rates raid have done immense damage, and their employer red tape has placed yet another burden on the shoulders of businesses. And in addition to these costs, the average small business now spends more than a working week every year doing the Government's paperwork. We need to cut taxes and make the tax system easier to navigate. Andy Burnham and John Healey must rule out tax rises at the budget and pledge not to increase an Exit Tax or any other new taxes. Unlike Labour, the Conservatives are listening to business, and we are committed to making tax lower and simpler. Julia Lopez MP, Shadow Business Secretary, said: The difference between Labour and Conservatives is simple. Burnham believes bureaucrats grow the economy. Conservatives believe businesses do. While Labour spend the coming weeks trying to find sneaky new ways to tax our entrepreneurs, we are focused on how we can free them. Lord Mackinlay of Richborough said: Small businesses and the self-employed are the backbone of the nation but have spent far too long being penalised by the state simply for wanting to just get things done. I'm honoured to work with the Shadow Chancellor to put this right for the millions of people up and down the country who are the main drivers of growth in the economy. Robert Colvile, outgoing Director of the CPS, said: I'm delighted to have been asked by the new Shadow Chancellor to serve on his Taskforce for small businesses and the self-employed. Small businesses are at the heart of the economy. They're the backbone of our high streets. More than 99% of businesses are small businesses. They employ more than 13 million people. But life for them is getting worse. We need to create a better, simpler, easier system for small businesses and the self-employed, so they can focus on what matters creating and selling great products and services. ENDS Notes to Editors
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