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.
Prestigious
1 hour ago
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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