How will the 2015 election results effect SMEs? | Storm Internet

For small and medium sized enterprises (SMEs) elections can be a worrying time, the good news is that the main political parties all appear to recognise how important SMEs are to the UK economy.

With the countdown to the General Election entering the final week, small businesses will be taking a good look at what the main parties have to offer. We’ve looked over the manifestos of the main parties and have summarised where each party stands on the main issues affecting small businesses.

Conservatives

• Plan to cut corporation tax down to 20% for businesses making profit in excess of £300,000. Businesses with profit of less than £300,000 will remain at 20%.
• Plan to treble the business start-up loans programme, helping 75,000 entrepreneurs to start their own business.
• Launch Help to Grow, hoping to create £1bn in loans for high-growth businesses by providing government guarantees to banks.
• Plan to expand its current small business funding initiatives such as the British Business Bank and will retain the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) to encourage investors to back new businesses.
• Plan to build a network of business mentors and provide loans to would-be entrepreneurs, supporting self-employment and franchising as a route back into work.
• Plan to abolish annual tax returns by 2020 with the information HMRC needs automatically uploaded into new digital tax accounts.
• Changes to the prompt payment code to tackle late payment practices with 30 day terms as standard, with a 60 day maximum limit.

Labour

• Promise to keep Britain’s corporation tax rate the lowest in the G7 group of economies.
• They will cut and then freeze business rates for 1.5million small businesses.
• Introduce a British Investment Bank and support a network of regional banks.
• Increase the National Minimum Wage to more than £8 an hour by October 2019.
• Will abolish zero hour’s contracts and introduce new zero hour’s contract rights to employees.
• Will address rising costs for small businesses and strengthen rules on late payment
• Will freeze energy bills until 2017

Liberal Democrats

• Have said they will “ensure our tax system stays competitive” and will make SMEs the priority for any business tax cuts.
• They say they will introduce a new supplementary tax on the banking sector.
• Committed to introducing Land Value Tax, which would replace Business Rates in the longer term and could enable the reduction or abolition of other taxes.
• Expand the British Business Bank to perform a more central role in the economy, tackling the shortage of equity capital for growing firms and providing long-term capital for medium-sized businesses.
• Encourage the growth of crowdfunding and alternative finance models.
• Provide further support to medium-sized businesses through a one-stop-shop for accessing government support, a dedicated unit in HMRC and the development of management skills.
• Increase National Minimum wage to £6.70 in October 2015 and plans to increase the National Minimum wage from £2.73 to £3.30 for apprentices.
• Will push for a third of government contracts to go to SMEs.

Scottish National Party (SNP)

• Plan to ensure small businesses are paid on time by pushing for prompt payment measures to be put into law.
• Press for the early devolution of Air Passenger Duty to boost tourism sector.
• Seek a funding boost for house building from the UK government.
• Support an increase in infrastructure investment, pushing for HS2 to connect to Scotland with a high speed connection between Glasgow, Edinburgh and the north of England as part of any high speed rail network.
• Seek additional investment to support a more rapid roll out of superfast broadband.
• Make the case for a targeted approach to business taxation, with targeted changes in tax allowances.

Green Party

• Corporation tax will be reduced to 20% for small businesses and they have plans to simplify PAYE by aligning the lower NI limit with personal allowances and abolishing the upper limit. Long term, they plan to merge NI into income tax.
• They also plan to abolish Employers’ NI with an increase in other business taxes to compensate.
• Improve the competitive position of small firms, maintaining corporation tax for small firms at 20% while raising that for larger firms to 30%.
• Increase access to finance by investing £2bn in a network of community banks, mutually owned and serving local areas or particular groups.
• Increase National Minimum wage to £10 by 2020.
• Ensure that legislation requiring that small businesses should be paid on time is properly enforced.

UKIP

• Business rates will be cut by 20% for companies that have premises with a total rateable value of less than £50,000. They plan to set up a Treasury Commission to design a turnover tax to ensure big businesses pay a minimum floor rate of tax as a proportion of their UK turnover.
• Press for a reform on the retail banking sector.
• Believe businesses should be able to discriminate in favour of young British workers.
• Wants to put a blanket ban on exclusivity clauses in zero hours contracts with the provision that small business employers will not have to grant a zero hours contracts worker a transfer to a fixed hours contract or permanent post.
• Will introduce a scheme whereby small businesses will provide evidence of repeated late payments to HM Revenue and Customs. If the large company is found to be systematically exceeding its contractual terms of payment with small businesses, a sanction of significant fines, proportionate to the extent of the abuse of terms, will be levied.
• Will pilot a scheme to improve access to trade credit insurance to small businesses. This insurance already exists in the market, but can prove restrictive for smaller companies.
• Will make it easier for small and medium-sized businesses to tender for public sector contracts, by removing the necessity to demonstrate compliance in areas irrelevant to the job being tendered for.

Do you run a small business? Are you concerned about how your business will be effected by the 2015 election result? Which party do you think is best for business? Let us know your thoughts by emailing us at [email protected] or tweet us using the handle @storminternet