In his first major speech as shadow chancellor, Andrew Griffith is urging Labour to commit to no further tax rises on businesses at next month’s Budget.
Griffith will deliver the address at Capital City College Group in London, calling on Andy Burnham and chancellor John Healey to simplify the tax system and ease pressure on small firms.
“Labour are squeezing small businesses dry,” Griffith is expected to say. “They are taxing them too much and crushing them with a complex tax system that is working against them.”
Griffith will also call on the government to pause a planned expansion of Making Tax Digital for Income Tax, which affects sole traders and landlords.
The regime is due to cover those earning more than £30,000 from April 2027, before extending to those earning more than £20,000 the following year.
Alongside his speech, Griffith will announce a review of the tax burden on small businesses, led by Conservative peer Lord Mackinlay and outgoing Centre for Policy Studies director Robert Colvile.
The review, due to report in December, will examine HMRC’s performance, the complexity of filing returns and claiming reliefs, and the tax treatment of the self-employed.
It will also scrutinise the IR35 off-payroll working rules and consider whether changes introduced in 2017 and 2021 increased compliance costs unnecessarily.
The Federation of Small Businesses estimates that tax compliance costs smaller firms £25bn a year, with the average business spending 44 hours annually on tax administration.
HMRC puts the annual cost to businesses at £15.4bn, though the National Audit Office has noted the research underpinning that figure has not been updated since 2015 and does not account for Making Tax Digital.
Griffith’s intervention comes as Healey prepares his first Budget amid mounting pressure from both businesses and trade unions over the direction of tax policy.
Burnham this week pledged a “culture shift in how Britain does business”, promising to make it easier to start and grow companies following meetings with entrepreneurs and major business leaders in Downing Street.
Reform UK has seized on the announcement to attack the Conservatives’ record, with shadow chancellor Robert Jenrick accusing Griffith of ignoring the same problems during the Tories’ time in government.
“Andrew Griffith was the very person who abolished the Office of Tax Simplification after the tax code ballooned to 23,000 pages — why on earth would anyone believe him now?” Jenrick said.
Reform has pledged to raise the VAT registration threshold from £90,000 to £150,000 and reverse the increase in employers’ National Insurance for British workers.
“Simply asking Labour not to raise taxes isn’t enough,” Jenrick said. “Britain needs a radical change in direction, not more hollow talk from a stale Tory opposition that had every opportunity to fix the system and failed.”
Adding further pressure on Healey ahead of the 28 October Budget, over 800 hospitality firms have called for VAT on the sector to be cut from 20 per cent to 10 per cent.
Trade unions are also pressing the chancellor for measures including higher taxes on large technology companies and banks, deepening the political complexity surrounding the Budget.