, , , , ,

Labour tax cut would save pubs over £2,000 from next week 

Labour have today outlined their ‘emergency support’ to help small businesses with rising costs. The measures include a tax cut which would take effect this week if the Government adopted Labour’s plans.  

Under the plans a typical small factory or workshop would save £2,700, a pub would be £2,600 better off and the average café or restaurant would save £2,700.

New analysis from Labour shows the current system of business rates is acting as a tax on growth, with smaller firms facing big tax cliff edges if they expand. A typical hairdresser who expands from one to two sites would see their tax bill go from £0 to £5,000, while an average shop goes from paying £0 to £10,000. 

Labour’s long-term plan would see Business Rates scrapped and replaced with a system that supported growth, and would be fairer between the small high street businesses based on bricks and the global tech giants based on clicks.

The party have also pledged support to British industry with an energy support fund to help with rising prices. The Government promised to support energy intensive firms six months ago but have failed to come forward with a package of support. Labour’s plans include direct help for industry to deal with rising prices now as well as support for the steel industry to decarbonise.

Labour’s plan includes:   

A tax cut for small business  

Labour would cut taxes for businesses by raising the threshold for small business rates relief for a year (from the current threshold of £15,000 to £25,000), to give SMEs a discount on their business rates bill from 1 April 2022/23.

Energy support fund  

Labour’s energy support fund would prioritise energy intensive industries such as steel, glass and ceramics to bring down their energy bills. At least 388,000 jobs are at risk if these factories are forced to close or reduce operations as the price of gas has nearly tripled since last October.

Green steel fund  

Labour would support the steel industry to decarbonise, with £3bn worth of investment in collaboration with business, over the coming decade.

No rise in National Insurance   

Labour would not be increasing national insurance contributions which will mean employers will pay an additional rate of 1.25% on employees’ earnings over £175 per week (£9,100 per year) from the 1 April.

Commenting on the emergency measures, Portsmouth South’s Stephen Morgan MP, said:

Small businesses are the bedrock of our economy in Portsmouth. Helping to protect them during this cost-of-living crisis protects livelihoods, protects jobs and protects our city’s communities.

“Labour’s plan would see business rates scrapped and replaced with a system that supported growth, and would be fairer between the small high street businesses based on bricks and the global tech giants based on clicks. 

“These emergency measures, if adopted by Government, would benefit so many of our city’s small businesses. Proposals would ensure a saving for a local pub of £2,600 and the average café or restaurant saving £2,700, all helping to keep our economy going”.

Jonathan Reynolds MP, Labour’s Shadow Business Secretary, added:   

“Businesses are facing a tidal wave of extra costs and being held back under the Conservatives through tax rises, inflation and the energy crisis. Action is needed now to ensure firms remain viable and extra costs aren’t passed onto consumers worsening the cost-of-living crisis.  

“Under Labour small firms would be around £2,000 better off from this week through our plans to cut taxes and we wouldn’t penalise small firms for expanding. Labour would back industry with our energy support fund and long-term plans to green the steel industry.   

“It’s clear great British businesses can’t afford this Government.”