Election - What the policies mean for your business - Business Finance

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5 Dec

Election – What the policies mean for your business

With just a week to go until the election, UK businesses will be keeping a close eye on individual party manifestos.

All parties claim to support British business, but which party will have your interests at heart? We look at the Conservative, Labour and Liberal Democrat manifestos to see what their key policies are for businesses.

Conservative

The Conservatives have a huge focus on Brexit with their main aim to “get Brexit done in January and unleash the potential of our whole country”. The uncertainty of Brexit remains a major concern for many small businesses.

A review of the business rate system is on the cards, they state: “We will cut the burden of tax on business by reducing business rates. This will be done via a fundamental review of the system. As a first step, we will further reduce business rates for retail businesses, as well as extending the discount to grassroots music venues, small cinemas and pubs.”

Entrepreneurs’ Relief allows some businesses to pay less Capital Gains Tax when they sell or ‘dispose of’ all or part of their business. The Conservatives have said that they will review and reform Entrepreneurs’ Relief.

They will “increase the Employment Allowance for small businesses and create a new National Skills Fund worth £3 billion.”

They “will clamp down on late payment more broadly.”

Unnecessary red tape will be assessed. “Through our Red Tape Challenge, we will ensure that regulation is sensible and proportionate, and that we always consider the needs of small businesses when devising new rules”

The Conservatives have reversed the corporation tax rate cut from 19% to 17%, which was due in April 2020 instead keeping it at 19%. They have also said that they will “increase the tax credit rate to 13% and review the definition of R&D.”

Labour

In an opposing move to the Conservatives, Labour will increase corporation tax from 19% to 26% or 21% for businesses with an annual turnover less than £300,000.

They will tackle late payments, including banning late payers from public procurement.

Self-employed workers are set to benefit as they want “to develop tailored support and protections for the self-employed, including: collective income protection insurance schemes, annual income assessments for those on Universal Credit, and better access to mortgages and pension schemes”.

Business rates will be replaced with a land value tax. The manifesto states: “A Labour Government will review the option of a land value tax on commercial landlords.”

By reviewing corporate tax relief they will “reform the inefficient system of tax reliefs.”

There are plans to increase the Real Living Wage – “We will bring in a Real Living Wage of at least £10 per hour for all workers.”

Focusing on apprenticeships they state:” We will further help small businesses by increasing the amount that can be transferred to non-levy-paying employers to 50% and introducing an online matching service to help levy-paying businesses find smaller businesses to transfer their funds to.”

Liberal Democrats

 Opposing Brexit, the Liberal Democrats want to “stop Brexit and use the Remain Bonus to invest in public services.”

Keen to tackle late payments they will “require all government agencies and contractors and companies with more than 250 employees to sign up to the prompt payment code, making it enforceable”.

New rules (IR35) which will affect private sector freelancers and contractors are to be introduced in April 2020 with a possible increase in tax and National Insurance. The Liberal Democrats will “review recent proposals to change the IR35 rules.”

They have said that they will “replace business rates in England with a Commercial Landowner Levy based solely on the land value of commercial sites rather than their entire capital value.”

They will “expand the apprenticeship levy into a wider ‘skills and training levy.”

The party wants to create “a new ‘start-up allowance’ to help those starting a new business with their living costs in the crucial first weeks of their business.”

They will expand “the rights and benefits available to those in insecure forms of employment, such as offering parental leave and pay to the self-employed.”

With regards to Corporation Tax they “want to take Corporation Tax to 20% and keep the rate stable with a predictable future path.”