General election 2017: the potential impacts on SMEs
2nd June 2017
All the main political parties have released their manifestos for the upcoming general election, as they compete to form the next government.
We take a closer look at how the 4 mainstream parties are planning to win over the electorate before they head to the polls on 8 June 2017.
Most of the Tory pledges surround Brexit negotiations with the EU, but their manifesto contained several measures which look likely to affect small businesses.
It calls on central governments to “play a role in supporting SMEs”, adding that 33% of central government purchasing will come from small businesses by the end of parliament.
Theresa May promises to hold big contractors to account by ensuring they comply with the Prompt Payment Code, with failure to do so rendering them unable to bid for government contracts.
Other Conservative proposals include:
- guaranteed worker representation in the boardroom
- blocking more “aggressive” foreign takeovers
- increasing the national living wage to 60% of median earnings by 2020
- government grants for a national retraining schemes
- more frequent revaluations of business rates (currently assessed every 5 years)
- confirming commitment to cut corporation tax to 17% by 2020.
Jeremy Corbyn intends to reintroduce the small profits rate of corporation tax.
Other policies mooted by the Labour leader included:
- scrapping quarterly tax reporting for small businesses
- securing a trade deal with the EU as part of Brexit negotiations
- creation of regional development banks to fund start-ups
- various reforms to business rates
- freeze in personal national insurance contributions.
The Scottish National Party
First Minister Nicola Sturgeon vows to protect Scotland’s place in the Single Market once Brexit talks have been completed, but small business priorities seem to be taking a back seat.
Business proposals in the Scottish National Party manifesto include:
- supporting calls for the annual investment allowance to be raised from £200,000 to £1 million per year in bid to encourage firms to invest in plant and machinery
- supporting national insurance reduction to lower employers’ costs when hiring staff
- lifting more than half of all premises in Scotland out of business rates
- lobbying Westminster to phase in digital tax reporting over 5 years
- support the introduction of effective legal protections to ensure small businesses – particularly those attempting to scale up – are paid on time
- pressing Westminster to ensure it demonstrates best practice on paying small businesses promptly for the services they deliver.
The Liberal Democrats
The Liberal Democrats claim it is their priority to ensure entrepreneurs and small businesses have access to the funding they need.
Lib Dem leader Tim Farron promises the state-owned British Business Bank will tackle the shortage of equity capital for growing firms and provide long-term capital for medium-sized businesses.
Other policies revealed in the Lib Dem manifesto include:
- creating a start-up allowance to help new business with living costs in first few weeks
- offer mentoring support for fast-growing businesses seeking to scale up
- review business rates to reduce burdens on small firms
- small firms to become the priority of any future business tax cuts
- reduce bureaucracy through reforms of the Regulatory Policy Committee
- reversing the planned corporation tax cut.
Planning for the future
In the following weeks and months, we'll be on hand to explain exactly how the election outcome will affect your business and financial situation.
Contact us to discuss planning for the future of your business.