Labour government would lump £3.5bn tax hike on London business, Theresa May's Conservatives warn

Helen Cahill
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Jeremy Corbyn Appears By Satellite At Croydon Labour Party Rally
It's the final day of campaigning (Source: Getty)

The Labour party's plans to increase corporation tax will result in a £3.5bn "tax bombshell" for London, the Conservatives warned today.

Labour leader Jeremy Corbyn has pledged to increase corporation tax from 19 per cent to 26 per cent, a hike he hopes will bring in £19.4bn.

Read more: Labour's tax plans "don't add up" according to the IFS

But according to the Conservatives' analysis, Corbyn's plan will hit London business with a tax hike of £3.5bn. More than 208,000 small businesses would be affected, and each would have to pay up to £12,000 per year.

Chancellor Philip Hammond said: "Jeremy Corbyn is preparing a tax bombshell that will hit London businesses hard. His plans to hike corporation tax will hammer investment in the capital and put jobs at risk."

And, the Institute for Fiscal Studies (IFS) has said that the Labour manifesto might not raise as much money as Corbyn is aiming for.

Speaking on the BBC this morning, IFS director Paul Johnson said Labour's plan "doesn't add up" and that in the long-term businesses would reduce investment in the UK.

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