“Our ambition is to create the most competitive tax system in the G20 within five years.We will restore the tax system’s reputation for simplicity, stability and predictability.”
David Cameron and the Conservative Party launched their manifesto for the impending May 2010 election today.
So what were the key points for business?
- Emphasis is made of (re)introducing a simplified, more stable and certain tax regime. There is little doubt that small and large businesses alike are confused by the levels of bureaucracy and red-tape mixed with constant meddling in the UK tax system of late. An intention to introduce stability and certainty must be welcome. Mention is made of introducing an Office of Tax Simplification – did I just say plans to reduce bureaucracy……?
- Tinkering with the planned increase in employer’s National Insurance – there appears to be a white elephant in the room here. Everyone seems to have been caught by the Tories’ proposed abolition of this “tax on jobs” when in fact the manifesto does not propose to abolish the 1% increase due in April 2011 but instead to tinker with the relevant income thresholds to make it apply to less employees and employers than would previously be the case – did I just say less meddling and increased simplification….?
- Reduction in the standard rate of corporation tax for companies from 28% to 25%. Small companies rate to be cut from 21% to 20%. Further cuts to follow. But how will this be funded? By simplification – if so, what does this mean for the future of capital allowances for expenditure on fixed assets like plant and equipment….? Is the end nigh?
- One year tax holiday from employer’s National Insurance for the first 10 employees of start-ups during the Conservatives’ first 2 years in Government
- Research and Development tax credits (R&D tax credits) will be improved and refocused on hi-tech companies, small businesses and new start-ups. Pretty much verbatim out of Dyson’ report as commissioned by the Tories – will the increase from 175% to 200% tax deductions be implemented….?
- Cut red tape to enable businesses to be started quickly. A one-click registration model for new businesses rather than sifting through endless forms. Sounds interesting – we await the detail.
- £2,000 bonus for every apprentice hired by SMEs
- Increased accessibility for SMEs to public sector contracts
- No mention of VAT….?
- Little mention of headline income tax rates….?
Is this enough support to help your business?