Tories Propose Tax Cut For UK Start-Ups

by Robert Lee, Tax-News.com, London

07 October 2009

Shadow Chancellor George Osborne has announced that a future Conservative government would remove a "tax on jobs" by giving new companies a break on their employer National Insurance contributions.

Osborne announced at the party conference in Manchester that any new business started in the first two years of a Conservative government will pay no employer National Insurance (currently 11% up to the upper earnings threshold of GBP844 per week) on the first ten employees it hires during its first year.

According to Osborne, the tax break will encourage new entrepreneurs and would generate around 60,000 additional jobs over two years. He also assured that anti-avoidance rules designed to ensure that newly created jobs are genuine would be "clear and simple."

"This is just another example of the Conservatives being the party of jobs at a time when Labour are the party of mass unemployment," Osborne claimed.

However, the Labour government has dismissed the proposed tax break as a "gimmick" while the Liberal Democrat party warned that the move could give new firms an unfair competitive advantage over their more established rivals.

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