"The Chancellor should focus on removing tax distortions that actively discourage growth and productivity, including, reforming the VAT threshold to smooth the cliff edge and promote growth beyond £90k turnover, rather than penalising expansion. Removing the tapering of personal allowances between £100k and £125k, which creates a 60% marginal tax rate, discouraging growth. Revisiting the childcare income threshold, which currently disincentivises earnings above £100k, either by removing it or doubling it and introducing targeted corporation tax reliefs for start-ups,"
"Rachel Reeves does need to take some bold, uncomplicated actions in the Budget, given the deficit she is facing. She could increase income tax by 2% and reduce National Insurance Contributions (NIC) by 2%. A wider base will be caught but importantly for her the 'working people' will not be caught in the same way. Ultimately, any tax rises she should form part of a broader growth strategy - removing anti-growth taxes and backing investment and innovation."
The Chancellor should eliminate tax distortions that discourage growth and productivity. Key proposals include smoothing the VAT threshold cliff edge to promote expansion beyond £90k turnover and removing the tapering of personal allowances between £100k and £125k that creates an effective 60% marginal tax rate. The childcare income threshold should be revisited or doubled to avoid disincentivising earnings above £100k. Targeted corporation tax reliefs for start-ups, such as a four-year exemption for qualifying new businesses, should be introduced to encourage innovation and job creation. Consider shifting rates by increasing income tax by 2% while reducing NIC by 2% to protect working people and back investment and innovation.
Read at London Business News | Londonlovesbusiness.com
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