Tories Pledge Tax Breaks For UK Business
Tuesday, March 2, 2010
Shadow Chancellor George Osborne has promised that a Conservative government
would take early action to reduce aspects of UK business taxation.
Speaking at the Conservative Party's spring conference in Brighton, Osborne
confirmed that previously announced plans to cut the rate of UK corporation
tax by 3% to 25% would be announced within the first 50 days of a Tory government
- assuming the Conservatives manage to oust the ruling Labour Party at the forthcoming
general election, expected in May.
In addition, Osborne promised that the Conservatives would reduce the tax burden
on small companies and attempt to simplify the business tax system by abolishing
some tax reliefs.
"Our first budget will contain funded measures to boost enterprise and
create jobs," Osborne told party delegates. "We will cut the corporation
tax rate paid for by removing complex reliefs and attract international headquarters
to Britain. We will reduce the small companies tax rate by simplifying the tax
code and make it far easier to get a business started."
Osborne announced at the party's main conference in Manchester last October
that any new business started in the first two years of a Conservative government
will pay no employer National Insurance (currently 11% up to the upper earnings
threshold of GBP844 per week) on the first ten employees it hires during its
According to Osborne, the tax break will encourage new entrepreneurs and would
generate around 60,000 additional jobs over two years. He also assured that
anti-avoidance rules designed to ensure that newly created jobs are genuine
would be "clear and simple."
Osborne also told the Brighton conference that a Conservative government would
"stop handing out tax credits to people earning more than GBP50,000 (USD75,000),"
and, somewhat controversially, would introduce a new bank tax "to stop
ordinary taxpayers underwriting the risks taken by super rich bankers."
While Osborne doubtless claims that his tax cuts are revenue neutral, given
the dire state of the UK's public finances it is unclear when the proposals
could actually be implemented.