Friday, October 15, 2021

Labor promises to slash UK business rates in ‘biggest overhaul in a generation’

The Labor Party will promise to eliminate business rates as part of a dramatic overhaul of taxes paid by firms.

Shadow Chancellor Rachel Reeves is set to announce that a Labor government will immediately cut the business tax, before eventually eliminating it altogether.

But she will also commit to plugging loopholes that allow some firms to evade tax, promising to eliminate measures that do not provide economic benefits.

The move comes as Labor seeks to get its convention back on track after internal row over party rules, criticism of Sir Keir Starmer after he refused to nationalize the energy giants, and Boris Johnson’s cabinet. Fallout from Angela Renner’s attack on “Scum”.

UK Labor Party leader Sir Keir Starmer and Shadow Chancellor Rachel Reeves
UK Labor Party leader Sir Keir Starmer and Shadow Chancellor Rachel Reeves visit businesses in Hove, East Sussex as they attend the second day of the Labor Party’s annual convention in Brighton on 26 September 2021 in Brighton Meet people (Stephen Russo/PA)

Labor will focus on economic issues on Monday, including the rising cost of living crisis, as well as Reeves’ taxation reforms.

In his set-piece speech, Reeves would say: “Our high street businesses do so much to enrich our lives and our communities, facing enormous adversity over the past year. Rates relief coming in March With that they are struggling right now.

“The next Labor government will eliminate trade rates.

“We will be doing the biggest overhaul of business taxation in a generation, so that our businesses can lead the pack, not look for opportunities elsewhere.”

Reeves will tell Labor’s conference in Brighton that the current trade rate system penalizes investment, entrepreneurship and the high street.

But she will also be eyeing expensive tax breaks offered to firms.

She would say: “There are hundreds of different tax breaks in the system.

“Some are important but many provide loopholes only for those who can give the best advice.

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“For businesses they create additional layers of complexity to navigate, and together they cost more than our entire NHS budget.

“We will look at every single tax break. If it is not good for the taxpayer or the economy, we will eliminate it.

Labor’s business tax reform will see the burden shift from the high street to the online giants and eliminate tax relief to private schools because of their charitable status.

The party will also aim to raise £440 million ($602 million) by closing interest loopholes related to the share of profits made by private equity fund managers and investment deals.

The changes were welcomed by some business groups.

“The shadow chancellor is empowered to propose concrete reform of a business rate tax that disproportionately burdens small businesses and sole traders at the heart of local communities,” said Mike Cherry, national president of the Association of Small Businesses.

He added: “Business rates are a regressive tax that affects firms before making the pound in turnover, let alone profits, while discouraging sustainable investment.

“This proposal marks a welcome call to action that will move more small businesses out of the regressive rate system and look forward to more fundamental reform.”

Conservative Party co-chair Oliver Dowden rejected Labor’s plans for the economy.

“Constant labor leaders threaten businesses with tax hikes, higher bills and more red tape,” he said.

“Only Conservatives can be trusted to support our businesses and help improve our economy as we build better.”

by David Hughes and Geraldine Scott

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This News Originally From – The Epoch Times

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