Economy
Q. Does the Current Corporation Tax System Inhibit Enterprise? Tell us your thoughts.
The NDP is no expert in this field. We have been involved in companies who have paid corporation tax for 30 years but are no experts. Like all taxes imposed by this government the tax is very complicated and difficult to understand.
There is clearly a problem with the rate of corporation tax because a number of our larger companies are moving their head offices overseas. This is not good.
What we do know is that smaller businesses have been hit hard by the removal of 10% band of corporation tax. The new rate for small companies is 21% from this April and will rise to 22% in 2010.
So a small company that in the past made £10,000.00 paid corporation tax of £1,000.00 now pays £2,100.00 increasing to £2,200.00 in 2010. This is the way that this government supports and helps small business.
At the very least the NDP will abolish corporation for all companies earning under £15,000.00 of profit.
A sliding scale of tax would probably be the best way forward from there. Something like
£15,001.00 - £50,000.00 |
10% |
£50,001.00 - £300,000.00 |
15% |
£300,001.00 - |
20% |
At the moment larger companies, those who earn more than £300,000.00 pay tax at a rate of 28%.
For this type of scheme to work and to be fair to all, we would probably have to take away a number of the capital allowance wheezes, which exist today. It can be made to work and it can be made easier.
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