We say growth is a priority. With the low forecasts, any growth would be a bonus. So why not really incentivise it?
Make growth tax free!
Would it not send a very clear message that the Government is committed to growth as a priority if it made it (more or less) tax free. I’m surprised the ‘nudge unit’ haven’t suggested this.
We could announce that any growth now is (more or less) tax free. For five years.
For existing businesses, this would involve reporting on any growth areas – new markets, new products….. And it would be ‘net growth’, the increase on existing turnover.
For new businesses this would be everything…..
And this would be about new profits arising from growth…
Possibly you could charge tax on the first slice – equivalent to an inflation element (putting prices up is not ‘growth’). This would give the government some benefit from growth. Beyond that you could possibly charge a simple 10% tax, not much but more than what is presently anticipated. Likewise drop VAT to 10% on growth revenue. Possibly reinforce tax breaks on new capital investment.
This could create a really positive sentiment – ‘can do’ thinking – affirmng that the UK is open to business. It would make the UK attractive to foreign businesses and investors.
And what is there to lose….?
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