The proposed tax cut would save small businesses an average of £5,000 a year by aiding them with staff costs. It would be achieved by quadrupling the Employment Allowance to £16,000 for a period of two years.
This would allow a small business to employ five people on an average salary without paying any National Insurance contributions; 1.1 million businesses would be eligible for this tax cut, which would save them an estimated £5.5 billion next year.
It comes as a record number of small businesses say they are struggling with rising costs whilst new Covid restrictions loom, according to a recent survey by the Federation of Small Businesses.
Meanwhile, the UK Government has announced small businesses will have to pay more National Insurance contributions in the new year, despite facing a tough winter.
Rod Falconer, Liberal Democrat candidate for Arbroath West, Letham & Friockheim, said: “Our local shops and restaurants are the backbone of our community and must be helped through a tough winter. Businesses in Angus are struggling with mounting bills and worries about the impact of the new Covid variant in the coming weeks.
“It is disgraceful that local businesses in our area are being forced to pay even more tax by this Conservative government. We should help small businesses who have already suffered so much during the pandemic.”
Liberal Democrat leader Ed Davey, said: “Cafes, shops and start-ups are all looking at this winter with dread, yet all Boris Johnson can muster up is a massive new tax bill. The Conservatives must be living on another planet if they think the answer to business owners’ problems is to put up their taxes.
“This country was promised tax cuts by the Conservatives, but yet again their promises have been proven not to be worth the paper they are written on.
“People and businesses need help now. I want to give our dedicated local business owners and entrepreneurs a helping hand, and to truly unleash Britain’s potential.”