The TaxPayers’ Alliance have now added their own reaction to that of others.

The TPA draws three main conclusions about George Osborne’s recruitment tax subsidy:

  • "Too small scale: An estimated £2.6 billion tax cut is a mere 0.5% of the Government’s 07/08 tax take. Given the scale of the crisis, and the fact that Corporation Tax, Business Rates and employers’ National Insurance Contributions alone place a burden of over £100 billion on business, much larger tax cuts are needed to help businesses and workers through the recession.
  • Too complex: Contrary to the stated Conservative Party principle of tax simplification, this proposal increases the complexity of the tax system with numerous conditions and qualifiers. These not only threaten to increase administration costs for business and Government, but also risk distorting companies’ behaviour and even potentially skewing the balance of the economy when it comes to recover from the current crisis.
  • Poorly targeted: Because the proposals are targeted at recruitment, they do nothing to help firms which are having to shed jobs. Tax cuts should be aimed at helping companies to avoid having to lay people off in the first place. Any firm making redundancies within three months of recruitment will be barred from the scheme, so businesses most affected by the financial crisis will get no benefit at all."

Difficult to disagree with any of that.  More from the TPA here.

66 comments for: “Too timid, too complex and poorly targeted”

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