What does the UK general election mean for my business?

What does the UK general election mean for my business?

General Elections can bring uncertainty due to whoever wins making their own polices which affect us all.

We’re going to focus on the key points of the leading parties’ manifestos ahead of the next general election on 4th July and how they may affect small businesses.

Conservatives

  • abolishing “the main rate of self-employed National Insurance. The party’s long term ambition is to scrap National Insurance entirely “when financial conditions allow”
  • further cut tax for workers by reducing employee National Insurance contributions by another 2p
  • no plans to raise corporation tax or capital gains tax
  • keep the VAT registration threshold under review  and exploring options to “smooth the cliff edge” at £90,000
  • uphold triple lock pension, raising state pensions by 8.5%. plan to introduce a “triple lock plus,” increasing the tax-free state pension allowance by at least 2.5%.
  • to expand tax free childcare – 30 hours a week of free childcare from when a child is nine months old until they start school.
  • To tackle late payment, promote digital invoicing, improving enforcement of the Prompt Payment Code, building on the creation Laof the Small Business Commissioner with “powers to tackle unfavourable payment practices
  • Continuing programmes including the Invest in Women Task Force and the Lilac Review to encourage more female and disabled entrepreneurs.
  • Work with the British Business Bank and private sector fund managers to secure a £250m Invest In Women Fund to support female entrepreneurs.
  • Take more companies “out of the scope of burdensome reporting requirements” by lifting the employee threshold allowing more companies to be considered medium-sized. This is expected to save small businesses at least one million hours of admin per year.

Labour

  • no plans to increase taxes on working people
  • not to expect increases to National Insurance contributions, as well as basic, higher, or additional rates of income tax, and VAT.
  • to cap corporation tax at 25%
  • modernising HMRC in order to tackle tax avoidance (this will involve even further increasing reporting requirements)
  • providing more training opportunities
  • remove zero-hour contracts and ban ‘fire-and-rehire’ practices.
  • to make it easier for small businesses to access funding and investment
  • to introduce tough new laws to stamp out late payments 
  • Scrap business rates and replace it with a system of business property taxation that is “fairer for bricks and mortar businesses”
  • To rejuvenate the construction industry – build 1.5 million new homes, create opportunities for small builders and tradespeople and to reduce red tape in the current building planning system
  • Retain annual investment allowance for small business, and “give firms greater clarity on what qualifies for allowances to improve business investment decisions”

Reform UK

  • raising the income tax threshold to £20,000 a year 
  • removing VAT from energy bills
  • raising the minimum corporation tax profit threshold to £100,000 – as well as reducing the corporation tax rate to 20% (and eventually 15%)
  • abolishing existing IR35 rules
  • raising the VAT threshold to £120,000
  • abolishing business rates for high street small businesses
  • Cut entrepreneur’s tax relief to 5%.
  • Reform the tax system.

Liberal Democrats

  • cut income tax by raising the tax-free personal allowance
  • Abolishing business rates and replacing them with a commercial landowner levy to help high streets.
  • support HMRC in hopes they can better tackle tax avoidance
  • review IR35 reforms (also known as off-payroll working) to make sure the self-employed are treated fairly
  • Setting a 20% higher minimum wage for people on zero-hour contracts attimes of normal demand.
  • Expand parental leave and pay
  • Supporting small employers with statutory sick pay costs
  • Reforming capital gains tax to “close loopholes exploited by the super-wealthy by adjusting the rates and basing them solely on capital gains while increasing the tax-free allowance from £3,000 to £5,000, on top of a new tax-free allowance for inflation, and introducing a relief for small businesses”.
  • boost trade for small businesses by bringing down trade barriers
  • enforce the prompt payment code – requiring companies with more than 250 employees to sign
  • Tackle the problem of late payments
  • protect triple lock pensions so they rise in line with inflation, wages, or by 2.5% (whichever is highest)
  • plan to establish a new employment status: the dependent contractor, which will sit between employed and self-employed. This will provide entitlement to minimum earnings levels, sick pay, and holiday entitlement.

What are your thoughts? What policies would you like to see implemented to support small businesses?

Will you be voting this year?