Tax Cut Tuesday

Truro and Falmouth MP Sarah Newton has welcomed a range of tax cuts that are due to come into force today to help local businesses.

With the start of the new financial year upon us a range of recently announced Government measures designed to help small business now come into effect. Measures being implemented today include:

• A billion pound package to help ease the burden of the business rates. Businesses with a rateable value of up to £50,000 will receive a business rates discount worth £1,000 for the next two years. With the average business having a rateable value of £32,000 this discount will be enjoyed by the majority of shops, pubs, and Post Offices in Truro and Falmouth. Doubled small business rates relief will be extended up to 2015, meaning that businesses with a rateable value of under £12,000 will continue not to have pay any business rates. In addition businesses will now for the first time be able to pay rates bills in monthly instalments.
• A cut in Corporation tax from 23% to 21%
• An increase in business investment tax thresholds. As a result the amount of money a businesses can invest with no upfront tax doubles to half a million pounds.

This rolling programme of liberating tax cuts continues, with Sunday seeing 450,000 businesses across the UK set free from National Insurance contributions. The new Employment Allowance will ensue that businesses will benefit from a new annual discount of up to £2000 on the National Insurance they pay. Business hiring new staff aged under 21 won’t have to pay any National Insurance contributions at all for them, ensuring that increased youth employment pays for employee and business alike.

Individual tax payers are also being enabled to keep more of the money they earn, through major new income tax cuts. From Sunday people will keep the first £10,000 of what they earn before they pay any income tax. When the Coalition Government took office in 2010 people were only allowed to keep £6,500 before income tax kicked in. As more of earnings becomes tax-free, people’s taxes go down. One in ten people in Truro and Falmouth now have no income tax whatsoever to pay, with 38,000 more local people benefiting from an average income tax cut of £805 since 2010.

Businesses and people alike are benefiting from the continued freeze in fuel duty. Petrol is now 20p per litre less than it would have been because of the three year freeze, which the Government has committed to continuing.

These lower fuel prices particularly assist self employed business people such as plumbers and decorators, who also received a major boost in 2011. In that year the Government increased the earnings threshold which determines when such businesses have to register for VAT, taking many out of VAT altogether.

Commenting on this package of tax cuts and freezes Mrs Newton said:

‘‘The Government’s efforts to get the very richest to pay more tax, along with careful handling of the economy and government expenditure, have paved the way for the tax cuts for many local people we are seeing coming into effect today.

‘From now on businesses can keep more of the money they make, to be spent on hiring staff or increasing wages and making the investments necessary to secure growth in the future. This means increased security and prosperity for Cornish families.

‘These changes are a step in the right direction. There is still much more work to do and I will continue doing all I can to enable a more secure and prosperous future for all my constituents. As the economy grows, I determined that no one is left behind.”