Give SMEs a National Insurance tax break says Balls

Accountants may be interested to learn that Ed Balls has called on the government to reverse the VAT increase temporarily and give small businesses a National Insurance tax break for one year if they take on new staff.

The shadow chancellor made his demands at the annual Labour party conference earlier this week saying tax reductions are crucial if we are to support the economy and drive job creation in the UK.

Balls received a standing ovation from delegates after he presented his five-point plan for stimulating the economy.

As well as his VAT and NI proposals, Balls wants to see the bank bonus tax repeated and the proceeds used to build affordable homes for 25,000 families and guarantee jobs for 100,000 UK young adults. He also proposed bringing forward long-term projects such as roads, schools and transport as a means of creating jobs and strengthening the economy. Furthermore, he said that there should be an immediate reduction to 5% in VAT on home improvements, maintenance and repairs in order to fuel the housing market.

However, he did warn delegates that his plan would have to work in tandem with tough decisions on tax and spending which would involve discipline on the pay of both public and private sector employees.

Mr Balls did admit that the previous Labour government made mistakes, including cutting the lowest income tax rate of 10%. We didn’t regulate the banks strictly enough or spend every pound of taxpayers’ money well, he told the conference. But the coalition’s austerity measures are not working and Britain needs a plan that will work to reduce the deficit.

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