LABOUR leader Jeremy Corbyn is plotting to double the level of tax on thousands of hard-working Britons, one of the UK’s most prominent law firms has warned.
The veteran left-winger is attempting to hike tax for thousands of companies in Britain to 32 percent, with the current rate set at 17 percent. His revised figure is just two percent off being double the current rate, and the plan would be enforced a soon as next year, Herbert Smith Freehills has warned to all prospective clients. The plan comes under Mr Corbyn’s mandatory share ownership scheme, which forces large businesses to pay the equivalent of an additional six percent more corporate tax, the Daily Telegraph reports.
It also attacks small businesses, by making firms with 250 employees or more to give workers a financial stake in their companies and how they are run, requiring them to put one percent of their shares into a yearly fund of up to 10 percent, with dividends of £500 paid to workers.
Herbert Smith Freehills said in their client briefing: “Although not presented as such, Labour’s inclusive ownership funds (IOF) proposal represents a new and very unusual form of corporate taxation.
“This is because dividends to the extent they exceed £500 per employee will be paid to the Treasury.”
The briefing adds: “A back of the envelope calculation suggests that the measure is equivalent to raising corporation tax (CT) on companies with more than 250 employees by approximately 3-6 per cent, on top of Labour’s promised CT rate of 26 per cent.
“This will almost double the rate of CT relative to the current rate of 17 per cent (effective as of next year), and will make the UK’s rate one of the highest in the developed world.
“The unusual method of taxation represented by the IOF proposal does not resemble any other existing form of taxation in the developed world, is not covered by double tax treaties, and would result in double taxation in both the domestic and international context.”
The warning comes weeks after Labour’s proposed inheritance tax scheme would leave average earners with a bill of £189,000 on a £500,000 home, the Tory Party said.
John McDonnell, Labour Shadow Chancellor, is considering the plan to change the current inheritance tax system to a “lifetime gifts tax” levied on cash gifts or homes as part of the party’s Land for the Many report.
The scheme would see anything inherited over a so-called “lifetime allowance” of £125,000 taxed as income, the publication also reports.
Former Tory chairman Brandon Lewis, who this week was replaced by James Cleverly, said the bills to those bereaving loved ones would be “eye-watering”.