£1 billion tax bombshell hits UK manufacturing, according to Labour analysis

New analysis from Labour shows UK manufacturing will be hit by a £895m tax bombshell due to the National Insurance rise for employers.

Figures revealed by Labour show the full scale of the Conservatives tax on jobs across sectors. Construction faces a £400m hit while mechanics and wholesale and retail trade pick up a £935m bill imposed by the Government.

Labour has announced an emergency support package for business which would cut taxes for small firms, saving the average small factory or workshop over £2,000 from this week, and introduce help with energy bills for energy intensive industries.

Jonathan Reynolds MP, Labour’s Shadow Business Secretary, said,   

“Businesses are being held back by a Conservative Government that isn’t on their side. The Conservatives’ decision to hike taxes during a cost of living crisis will make things even harder for businesses and families.

“Labour is on the side of Britain’s manufacturers. Labour would take action on cost of living by introducing a one-off windfall tax on gas and oil producers, helping small firms through tax cuts to manage rising prices, and supporting energy intensive industries like ceramics to stay competitive.

“British businesses deserve better than the Conservatives.”  

ENDS   

Notes to editors  

• Estimate of the cost to employers of the NICs rise by sector

https://questions-statements.parliament.uk/written-questions/detail/2022-03-28/148172

Analysis of Business Register and Employment Survey : open access https://www.nomisweb.co.uk/datasets/newbres6pub

• 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 

• Labour has announced an emergency support package for business which would cut taxes for small firms, saving the average small factory or workshop over £2,000 from this week.

https://www.telegraph.co.uk/news/2022/04/02/business-rates-must-lowered-help-tackle-cost-living-crisis-urges/