The Liberal Democrats have called for taxes to be slashed on small businesses. Local Liberal Democrats have backed the proposals which would benefit 1,700 small businesses and entrepreneurs in Bath, from cafes and restaurants to high street shops.
The proposed tax cut would save small businesses an average of £5,000 a year by aiding them with staff costs. It would be achieved by quadrupling the Employment Allowance to £16,000 for a period of two years. This would allow a small business to employ five people on an average salary without paying any National Insurance contributions. A total of 1.1 million businesses nationally would be eligible for this tax cut, which would save them an estimated £5.5 billion next year.
It comes as a record number of small businesses say they are struggling with rising costs whilst new Covid restrictions loom, according to a recent survey by the Federation of Small Businesses. Local restaurants have also reported a surge in Christmas bookings being cancelled, setting owners back thousands of pounds.
Meanwhile, the Conservatives have announced small businesses will have to pay more National Insurance contributions in the new year, despite facing a tough winter. Research by the House of Commons Library has shown the Conservative plans are set to hit an estimated 1,500 local businesses in Bath with a 4.6% tax bill.
Wera Hobhouse, Liberal Democrat MP for Bath, said:
“Our local shops and restaurants add so much to our economy and community spirit and must be helped through a tough winter. Businesses in Bath are struggling with mounting bills and worries about the impact of the new Covid variant in the coming weeks. We need to help them now with a big and bold offer.
“It is disgraceful that local businesses in our area are being forced to pay even more tax by this Conservative government. We should help small businesses who have already suffered so much during the pandemic. That is why I am backing calls for our local businesses to receive a tax cut.”
Cllr Kevin Guy, Liberal Democrat Leader of Bath & North East Somerset Council, said:
“Cafes, shops and start-ups are looking at this winter with dread, yet all Boris Johnson can muster up is a massive new tax bill. The Tories claim that we Lib Dems don’t support businesses. This is absolute nonsense. This country was promised tax cuts by the Conservatives, but as with so many of their promises, this promise is hollow.
“People and businesses need help now. I want to give our dedicated local business owners and entrepreneurs a helping hand so that they can flourish again.”