Reform UK has announced a series of economic policies it says it will implement if it defeats the Labour government at the next general election, including a significant increase in the VAT registration threshold. The party has promised to raise the threshold from £90,000 to £150,000, a move it argues will relieve pressure on small businesses.
VAT threshold rise and tax reforms
The announcement was made by Robert Jenrick, Reform's Treasury spokesperson, who detailed the party's plans in a news release. Alongside the VAT threshold increase, Reform pledged to scrap GDPR and replace it with a light-touch privacy law. The party also said it would expand the Seed Enterprise Investment Scheme (SEIS) to allow relatives to invest in small businesses.
Reform's proposals include a £30 tax credit for anyone forced to wait more than 30 minutes on the phone to HMRC. The party also said it would link the pay of senior HMRC officials to their customer service performance, with the threat of dismissal if waiting times do not improve.
SEIS expansion to help family investment
In its news release, Reform explained the rationale behind the SEIS changes. "Our changes to the 'Seed Enterprise Investment Scheme' will make it easier for small businesses to attract investment," the party said. "This highly successful scheme provides tax advantages for investments in small businesses, but it isn't available to close relatives. Most business owners don't have wealthy friends who can invest in their firms - and the young are increasingly without equity in homes to draw upon; our reform would allow parents and grandparents to receive tax advantages for modest investments too."
Under the proposed changes, parents and grandparents would be able to invest up to £250,000 in their child or grandchild's small business and receive an income tax rebate of 50%, as well as an exemption from capital gains tax if they hold the investment for three years.
Scrapping net zero and electric vehicle mandate
Reform also said it plans to scrap the 2035 Electric Vehicle Mandate to ease pressure on tradesmen. The party intends to abolish what it calls "silly rules that drive up the cost of doing business," including Net Zero policies, which it argues will drive down the cost of gas and electricity. It also plans to repeal and replace GDPR.
For small businesses that rely on diesel vehicles, Reform said it will scrap the 2035 ban on new petrol and diesel cars and vans. The party also promised to create a £2,000 Apprentice Retention Bonus and remove Labour's work regulations, which it describes as damaging.
Reversing inheritance tax raid and supporting growth
Reform said it would reverse Labour's inheritance tax raid on family businesses and farms. The party cited data showing that less than a fifth of Britain's small businesses expect to grow over the next 12 months, while over a third expect to shrink or close altogether.
The news release concluded: "In addition, Reform will grant a £30 tax credit to anybody forced to wait more than 30 minutes on the phone to HMRC. To make sure officials hit their targets, Reform will tie the pay of senior HMRC officials to their customer service performance. If senior officials fail to make progress on waiting times, they will be fired."
