There are just two weeks to go until the General Election. The campaigns are now in full swing and the manifestos have been published. In this blog post we take a look at what’s on offer for small, medium and micro enterprises (SMMEs).
Whatever the outcome of the Election, a reassessment of small businesses’ tax burdens is on the horizon, as all the main parties agree that change is needed. Labour pledges to reintroduce a lower small profits rate of corporation tax, and will exclude SMMEs from quarterly reporting requirements. The Liberal Democrats pledge to make SMMEs “the priority for any future business tax cuts”. The Conservatives set out in their manifesto that they believe the system is too complex and costly for small businesses, and promise to “simplify the tax system”.
Although the detail accompanying these pledges is varying, the message is clear: all the main parties agree that the tax system is making running a small business too costly and complicated.
Business growth support
With Brexit looming, many SMMEs are expressing concerns that they are losing out on potentially lucrative contract opportunities on the continent. What’s more, an unstable business environment will make it harder to continue a steady stream of growth, and pressure has been growing for Westminster to offer tangible solutions.
The Conservatives recognise this, and promise in their manifesto to “ensure that 33 per cent of central government purchasing will come from SMEs”. Labour go one step further by promising to create a new National Investment Bank as well as regional development banks. The Lib Dems would increase the number of SMMEs benefiting from the digital economy by supporting ICT capital expenditure- something which small businesses in care struggle with in particular.
We have seen that Brexit could threaten the funding streams of up to eight in ten SMMEs in the UK by throwing into doubt future investment- so how are the parties responding to this?
The Conservatives don’t address this issue directly, but will seek to “ensure that small and medium sized businesses are able to identify the right markets and sectors to win vital contracts abroad.” Labour plans to use its new National Investment Bank to plug potential funding gaps, and the Lib Dems would launch a ‘start-up allowance’ aimed at helping SMMEs with their living costs in their initial few weeks of life.
Keep up to date with the most important announcements in business by following our This Week In Business blog, updated every Friday.