Hurray! The Tories finally propose something half-way sensible: a modest cut in Employer's National Insurance, the Second Worst Tax Of All.
But it's only for six months and for firms with four or fewer staff, blah blah. So a firm with five staff will be able to qualify ... if they sack one member of staff? Have they thought this through?
Here's a better plan, Mr Camerosborne, scrap Employer's National Insurance. Once you factor in all the dynamic effects, the overall net fall in revenues would be minimal.
Monday, 20 October 2008
"Cameron proposes 1p cut for firms"
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3 comments:
Before I pressed the wrong button
"interes[t-]free loan from the government equivalent to about 10 weeks of annual VAT
Maybe a bit less depending on how good your clients are at paying bills. As to NI - I heard 1% "cut" ie from 12.8% to 11.8% - wow!! that'll get employment up and SMEs excited.
Cameron is a useless f**kwit, as is Osborne. They've decided not to tell the electorate the truth ie that spending £400 billion on the banking system means that an enormous alternative expenditure has to be sacrificed. "Business as usual" (= spending a la Brown) means the UK will end up as financial garbage. Do Cam/Osb really still intend to adopt Labour's spending plans for the first 4 years of a Conservative administration? Seems so.
U, to be fair, a 1% cut in Er's NI (if applied to all businesses) is a gross tax cut of £3 billion, and might make the difference between a business surviving or failing.
A 1% corporation tax cut is a gross tax cut of £1 billion and, by definition, does not help marginal businesses become profitable.
Apart from that, your comments on Camerosborne seem fair enough.
MW
Supposing I have a gross annual wage bill of £500,000 for 20 employees (which ain't far off reality): this translates into Er's NI of £64,000. Reduction of NI Er rate to 11.8% from 12.8% translates into NI saving of £5,000: a reduction in my wage cost of 0.9%. I'd rather have the money than not but I don't think that £5,000 pa (£100 pw) is going to mean the difference between life and death or (more to the point) save the job of one employee.
Anyway, Cameron is talking about a maximum 4-man enterprise. On that basis - and on my example - you'd be talking £1,000 pa max. That may be a life-saver for a very few businesses but not, I suspect, a major contribution to the small business sector even if you aggregate all Er NI saving to £3 billion (which, as you write, assumes all businesses not the tinies proposed by Cameron)
I agree with you on CT.
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