Originally written by Timothy Adler on Small Business
Sajid Javid, the ex-chancellor, has thrown down the gauntlet for the Government to increase the national insurance employment allowance to £20,000 for small businesses.
Mr Javid has called for national insurance to be given a “significant temporary” reduction to make it cheaper for small businesses to take on staff.
>See also: How to reopen your restaurant, pub or hotel post-lockdown
“If we want to support and stimulate employment, then axiomatically the best option is to cut the payroll tax — employer’s national insurance,” Mr Javid said.
“Tax employment less, and all other things being equal you will end up with more of it.”
Many fear a coming tsunami of unemployment as small businesses are weaned off the Coronarius Job Retention Scheme, with the Bank of England warning of 10 per cent unemployment as Britain emerges post lockdown.
The proposal to lift the Employment Allowance ceiling is just one of scores of proposals in a paper he has written for centre-right thinktank the Centre for Policy Studies, setting out measures to boost the post-Covid economy.
>See also: How to deal with a furloughed employee who refuses to return to work
The former cabinet minister, who resigned from the Treasury in February, said
Tag Archive for Sajid Javid
Hot Business News Today
Sajid Javid may guillotine, not scrap, Entrepreneurs’ Relief
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Sajid Javid, the chancellor, may guillotine Entrepreneurs’ Relief instead of scrapping it completely, following protests from entrepreneurs.
According to the Sunday Times, Sajid Javid may shut off Entrepreneurs’ Relief for new businesses in next month’s Budget instead of scrapping the tax break completely.
And the tax break for entrepreneurs selling their businesses would be capped at £1m worth of capital gains tax to pay instead of the current £10m.
Entrepreneurs’ Relief halves the amount of CGT business owners must pay when they sell up, from 20 per cent to 10 per cent on sale.
Introduced by Gordon Brown’s government, the idea was that entrepreneurs would reinvest in their companies rather than sell out when they can.
However, Treasury officials see Entrepreneurs’ Relief as a tax loophole and want to shut it down completely. Prime minister Boris Johnson claimed the £2.4bn-a-year tax break served only to make the “staggeringly rich” even wealthier.
In October the Institute for Fiscal Studies criticised Entrepreneurs’ Relief for just rewarding owners already selling their businesses, rather than encouraging them to reinvest in another start-up.
The Association of Accounting Technicians (AAT) went further, calling for Entrepreneurs’ Relief to be scrapped and that the £3bn or so the
Hot Business News Today
Call for Treasury to simplify small business tax regime
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Government has been urged to simplify the current small business tax regime, replacing myriad taxes with a levy on turnover.
Free-market think tank the Centre for Policy Studies argues that small and family businesses with revenue of under £1m should be given the option to replace corporation tax, business rates, VAT and employer’s National Insurance with a “simple consolidated tax”.
Home Secretary Sajid Javid was due to launch the Think Small report in London today. The report is written by Nick King, former special adviser to Javid when he was business secretary.
According to a YouGov poll commissioned for the report, 75pc of small business owners believe the current tax regime is too complicated.
Entrepreneur enthusiasm
Seventy-two per cent out of more than 2,000 SME owners and managers said they would move to a simple turnover tax if the amount of tax they had to pay remained the same, because of its simplicity. More than a quarter of respondents said they’d move to the new system even if it meant paying more tax.
From the Treasury’s viewpoint, a SCT would raise the same amount of money as current arrangements, while SME owners who found themselves paying more under the