Labor will bring down business prices and undertake the “biggest revision of corporate taxation in a generation,” the Labor Shadow Chancellor will say in his speech Monday and say the current system penalizes entrepreneurs and business investment.
Rachel Reeves will also announce that the party will conduct a major review of existing tax breaks, suggesting it would target wealth reductions such as income from buy-to-let properties.
She said the reliefs “create extra layers of complexity to navigate, and together they cost more than our entire NHS budget.
“We want to see each individual tax relief. If it does not deliver to taxpayers or to the economy, then we scrap it. ”
The Shadow Chancellor said a Labor government would freeze business prices and eventually replace them with a new, as yet undefined system that she said would reward investment, with a particular focus on companies investing in decarbonisation and green technology.
She said a new system would involve more frequent revaluations and ensure immediate reductions in bills when property values fall. Businesses will be encouraged to move into empty premises to revive main streets and neighborhoods.
In her speech on Working conference, Reeves will say that high street companies have faced “huge adversity in the past year … They are struggling right now, with an increase in the rise in interest rate cuts coming up in March.
“The next Labor government will reduce business prices. We will be conducting the largest audit of corporate taxation in a generation so that our companies can lead the package and not see opportunities go elsewhere. ”
Labor said the policy would mean a freeze on business interest rates until the next revaluation, benefiting sectors such as retail and hospitality and raising the threshold for easing for small businesses, which would give such businesses a discount before making more fundamental reforms.
At an event before his speech, Reeves said Labor “would not balance the budget on workers,” unlike the Tories.
She suggested that the government should look at raising money from private equity firms and large corporations, instead of increases in its national insurance policies, increases in municipal taxes and universal credit cuts.
She embarked on the government’s “complete complacency” about Britain’s recovery from the pandemic and “working people facing the government for this government’s mistakes”.
Reeves said she would challenge the Tories because of economic competence, saying she knew “we would win” and praised U.S. President Joe Biden for understanding that “wealth does not just seep down from the top, but is created from below. and up from the middle ”.
After speaking after Reeves at a summit, Andy Burnham, Labor mayor of Greater Manchester, moved on to economic policy by calling for universal basic income for all and “a good, secure home as a human right in law”.
The Labor Party said the temporary changes could be paid for by a significant increase in digital service charge – which is currently a 2% annual tax on tech giant’s revenue. Labor would raise taxes to 12% by 2022/23, Reeves would say, a move that would increase £ 2.1bn, although the party is highly unlikely to be in power.
The plan is further complicated because the government is currently involved in negotiations on one global corporation tax agreement, is expected to be implemented in 2023, provided that countries remove any domestic digital service charge.
Labor is in favor of the global deal, although it would like tougher terms, and it is expected to further increase government revenue. However, this would mean that in practice the party would not be able to implement a tax increase in digital services.
Mike Cherry, president of the Federation of Small Businesses, said the principle would be a huge positive step for many high street businesses. “The glove has been thrown down by the opposition and we hope ministers listen. This is what a tax policy for small businesses looks like, ”he said.
“Business interest is a regressive tax that hits companies before they have earned a pound in revenue, let alone profits, while discouraging sustainable investment. This proposal marks a welcome call for action that would take more small businesses out of the regressive interest rate system and rightly look forward to more fundamental reforms. ”
Reeves, a former Bank of England economist, announced on Sunday that she would set up a value-for-money office to deal with public waste and introduce a new set of fiscal rules – a move aimed at emphasizing that Labor can be trusted the economy.
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