The Federalist Party puts local interests first, and this logically extends to local businesses. It is imperative that local businesses are treated well as they form the cornerstone of local economies, ensuring employment, innovation and prosperity around the UK.

We believe there is a significant difference between local businesses that are just getting started (or are just getting by) and large national or multinational businesses. We believe this should be reflected better in the way these entities are taxed.

We believe in tax being collected locally and distributed according to the principles of federalism. Business taxes should be collected locally, including corporation tax and business rates, and distributed to the federal level from local levels taking account of a number of factors including but not limited to, average salaries, cost of living and social issues.

Whether all local authorities contribute the same level of taxation upwards, or whether this is distributed depending on local needs to retain more of the income, such as in poorer areas, it will enable communities to better manage their local economy.


We believe local communities should have the right to set corporation tax for their area. This will allow them to set taxes low to attract further business in times of high unemployment. It will also allow communities to set higher taxes in areas where the pressure on commercial/industrial properties is high.It is our belief that this will help create a more flexible system where jobs will become available where they are needed, and that any low-tax zones will contribute to ensuring the competitiveness of the country as a whole.

We suggest zero corporation tax on profits of less than 250,000 in a company where at least 50% of the main shareholders, constituting at least 50% of the total shareholding, have the company as their main source of income. Normal corporation tax would apply to any amount above the £250,000 threshold, or for the full amount for any company that does not fulfil the criteria.This will provide a significant benefit and incentivise creation of new businesses, promoting innovation and entrepreneurship. It will also help offset the advantage that large international companies have in areas where these compete with local businesses.

We also want to allow local communities the right to waive corporation tax on businesses essential to the local economy for a maximum of three years out of every 10 years. This can be used as a last resort to keep vital local businesses from going under during difficult times, provided it can be documented that this would have an effect on the business’ chance of survival, and that the business not surviving would have a significant impact on the local economy.

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