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 first year.
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.