personal finance

Johnson to woo business with tax breaks worth £1bn

Boris Johnson will seek to woo corporate Britain on Monday by pledging to reduce business rates and provide a series of tax breaks worth about £1bn a year.

Addressing the CBI annual conference in London, the prime minister will say the delivery of Brexit under a Conservative government would allow businesses to “focus on what you do best — spurring innovation, creating jobs, stimulating growth”.

Meanwhile Labour leader Jeremy Corbyn will use his own speech to the CBI conference to outline reforms to the apprenticeship levy to help tackle climate change.

Mr Johnson will set out a series of Tory manifesto pledges that will amount to tax breaks for business worth about £1bn by 2022-23.

He has promised a “tax-cutting” future under his premiership, but he has been constrained by chancellor Sajid Javid’s new fiscal rules that require the current budget — the difference between government tax receipts and day-to-day public spending — to be in balance by 2022-23.

The prime minister said the Tories would use the first Budget after the election to launch a “fundamental review” of business rates, the property-based tax paid by companies that many businesses have complained about in the past two years.

“The burden of business rates will be reduced,” the party said, in a statement outlining the Conservative plans.

Companies, notably retailers on struggling high streets up and down the country, have protested about rising business rates that generate a total of about £30bn in tax receipts each year.

Business rates are based on “ratable values”, which are calculated every five years by reference to office rental charges, and a multiplier that rises annually in line with inflation. The last assessment of ratable values took place in 2017.

Some companies have complained that they pay more in business rates than they do in corporation tax.

Mr Johnson also said a Conservative government would increase the employment allowance, which reduces employers’ bills for national insurance contributions.

The allowance was introduced in 2014 by then-chancellor George Osborne, initially taking the first £2,000 off every company’s bill for national insurance, as part of efforts to persuade businesses to take on more workers.

The allowance was lifted to £3,000 a year in 2016 and Mr Johnson is proposing to increase it to £4,000.

“This will amount to almost a half a billion pound tax cut for small business,” said the Tory statement.

Mr Johnson is planning to review the scope of research and development tax credits, to establish whether investments including cloud computing and data should benefit.

He is proposing to increase the R&D tax credit rate from 12 per cent to 13 per cent, in a move that should boost manufacturing, as well as professional, scientific and technical services industries.

The prime minister is planning to increase the structures and buildings allowance — which benefits companies that invest in new or renovated commercial premises — from 2 per cent to 3 per cent.

Mr Johnson will tell the CBI: “Let’s not beat around the bush, big business didn’t want Brexit. You made that clear in 2016 and this body said it louder than any other.

“But what is also clear is that what you want now — and have wanted for some time — is certainty. So that you can plan and invest, so you can grow and expand, so that you can create jobs and drive prosperity.”

Mr Corbyn will say a Labour government would create a climate apprenticeship scheme to provide workplace-based training for 320,000 people in England during its first term.

Labour wants businesses to benefit from 80,000 people each year being trained as apprentice engineers and technicians in renewable energy and transport, among other things.

The arrangements will be funded by taking 25 per cent of the funds that employers set aside under the apprenticeship levy, topped up by companies’ dividends paid into Labour’s proposed inclusive ownership funds.

Mr Corbyn will say: “Climate apprenticeships will offer training to school leavers and workers looking to change jobs mid-career, creating the engineers, technicians and construction workers we need to transition to a green economy.

“This election is our last chance to tackle the climate emergency. The Tories have failed to invest in our economy, failed to deliver apprenticeships and failed to face up to the climate emergency.”


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