Shadow Chancellor Rachel Reeves will tomorrow announce Labour
will cut – and eventually entirely scrap – business rates,
replacing them with a new system of business taxation fit for the
21st century.
The announcement follows news yesterday that Labour would set up
an Office for Value for Money to tackle government waste and
introduce a new set of fiscal rules to get a handle on public
finances, as part of their mission to tax fairly, spend wisely
and get the economy firing on all cylinders.
Making the announcement at Labour conference, Reeves will say
that the party would shift the burden of business taxes to create
a level playing field, slamming the current system under the
Conservatives as one that punishes investment, entrepreneurships
and the high street.
And the former Bank of England economist will also announce the
party will undertake a major review of existing tax reliefs,
scrapping those that don’t benefit the taxpayer or the economy.
She will outline how the party will move forward on tax reform
with three key pillars determining their approach: tax fairness,
tax efficiency, and shifting the burden of business tax.
Shadow Chancellor of the Exchequer will say:
On businesses, she will say:
“Our high street businesses do so much to enrich our lives and
our communities, facing huge adversity in the past year. They are
struggling right now, with a cliff-edge in rates relief coming up
in March.
“The next Labour government will scrap business rates.
“We will carry out the biggest overhaul of business taxation in a
generation, so our businesses can lead the pack, not watch
opportunities go elsewhere.
“And here is our guarantee: the system we replace it with will
incentivise investment, feature more frequent revaluations, and
instant reductions in bills where property values fall, reward
businesses that move into empty premises, encourage, not
penalise, green improvements to businesses, and no public
services or local authorities will lose out from these changes.
“Labour’s approach will be based on working together, with
businesses, workers and public bodies all pulling together in a
national endeavour to rebuild Britain and to seize the
opportunities of the future."
On tax breaks, she will say:
“There are hundreds of different tax breaks in the system.
“Some are important but too many simply provide loopholes for
those who can afford the best advice.
“For businesses they create extra layers of complexity to
navigate, and added together they cost more than our entire NHS
budget.
“We will look at every single tax break. If it doesn’t deliver
for the taxpayer or for the economy then we will scrap it.
“Labour will tax fairly, spend wisely, and get our economy firing
on all cylinders.”
Ends
Notes to Editors
· The party have said they will freeze Business Rates until the
next revaluation, benefitting sectors like retail and hospitality
who hit the most by this tax, and that they will increase the
threshold for small business rates relief (from the current
threshold of £15,000 to £25,000), to give SMEs a discount on
their business rates bill for 2022/23, ahead of more fundamental
reform.
· The cut in business rates in 2022/23 will be paid for by
raising the rate of Digital Services Tax to 12% for that year,
Longer term reductions in the burden of business property
taxation will be funded by securing an effective new Global
Minimum Rate of Corporate Tax, which Labour has been calling for
since the summer.
· Please see attached briefing for more details on the
announcement.
