Labour has pledged to slash business rates for 1.5 million small businesses and freeze them the following year, if it comes to power.
Shadow Chancellor Ed Balls said today the party would bring in cuts in business rates for small businesses worth an average of £400, instead of going ahead with a corporation tax cut for large firms.
He claimed over the course of Parliament the Conservative-led government would have spent more than £7bn cutting the rate of corporation tax to the benefit of big companies.
But new figures published by Labour today claim that since 2010, revenue from business rates has gone up by almost £3bn and that higher business rates have cost firms an average of £1,500 a year.
“Unleashing the potential of smaller businesses to grow, create more good jobs and raise living standards is a vital part of Labour’s better plan,” said Balls. “And we will look to go further by putting small businesses first in line for future tax cuts. This is part of our plan to deliver a simpler and fairer tax system for small businesses.
“Under the Tories higher business rates have cost firms an average of £1500 a year and are an ever bigger part of their tax burden. So instead of another corporation tax cut for large companies which helps fewer than one in ten firms, we will cut and then freeze business rates for small firms instead.”
Labour’s plans were welcomed by the BRC. “The important part of today’s announcement - from our perspective at least - is that Labour would direct support at small businesses,” said a spokesman.
“We couldn’t agree more if that support is part of a wider review of the structure of the system – we are greatly encouraged that they support the current government’s structural review – and we have long suggested that the government take small businesses out of the system all together.
“They only account for 6% of the tax take and create an incredible amount of hassle for the likes of the VOA.“
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