Tories unveil 250m tax cut for new firms
THE Tories yesterday announced a surprise tax cut for new businesses in a bid to create 60,000 new jobs.
Speaking at the party’s conference in Manchester, shadow chancellor George Osborne unveiled plans to exempt new firms from some National Insurance contributions.
Osborne said that any business that launches in the first two years of a Tory government will not have to pay employers’ national insurance on the first 10 employees it hires during its first year of trading.
The scheme – which is capped at £25,000 per firm – will cost around £250m a year, Osborne said, although he did not reveal how he would fund the plans.
He added: “We have to end Labour’s jobs crisis, which has left one in five young people unable to find work.”
And Osborne said the policy would send a different, more pro-business message to employers.
“Invest here, set up your business here, come and make your enterprise here and we will support you. We will send a message loud and clear that this country is open for business.”
Employers’ organisation the CBI said the Tories were right to abolish the “tax on jobs” created by new businesses.
John Cridland, CBI deputy director-general, said: “Many business people are put off hiring their first employee by the sheer level of taxes and red tape, particularly at this time.
“This proposal should help new firms take bolder steps in creating jobs, and would give a much-needed boost to UK entrepreneurs looking to grow a business.”
And Forum for Private Business chief executive Phil Orford said the plans were “a genuine stimulus to employment”.
But Vince Cable, the Lib Dem Treasury spokesman, said: “This tax break for new businesses would mean that new firms will be able to undercut existing small companies.”