UK Conservative Party Promising Tax Cuts

October 6, 2009 Taxation in UK  No comments

The UK Conservative Party has announced a proposal under which taxes would be cut for firms creating new jobs. Hints have also been given regarding the cut of UK’s 50% top personal tax bracket.

George Osborne, UK Conservative Party member and Shadow Chancellor of the Exchequer, stated on the 5th of October that under a Conservative Party government, employers would not be required to pay National Insurance contributions for two years. Cutting the levy, which amounts to 12.8% of an employee’s salary, is estimated to ultimately cost the Government £250 million. Funding for this move would come from budget cuts in other areas, although exact details will be provided at the Conservative Party Conference, October 8th.

The tax exemption is applicable only to newly created businesses, and only for the first ten employees hired. An upper limit of £844 per week per employee applies to the tax saving. According to statements made by George Osborne, this opportunity could create 60,000 jobs in Britain.

David Cameron, Conservative Party leader, has given hints that the party will cut the 50% scheduled to apply to those with incomes surpassing £150,000 from April 2010. He stated his views on the tax, saying “You don’t have to persuade me that high marginal tax rates are a bad idea,” and “The sort of tax system I believe in is one that’s effective in raising revenue, rather than one that’s trying to make a particular point.”

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