With the General Election just weeks away, the political campaigning is in full swing. But what will the results of 8th June mean for SMEs in the UK?
We take a look at the key pledges made by those who want your vote.
Both Labour and the Liberal Democrats have pledged to review and cut business rates for smaller companies, while the Conservatives are committing to increasing the personal allowance for income tax to £12,500, and raise the higher rate threshold to £50,000.
What will this mean for SMEs? – SMEs will benefit in one way or other from any of the main party policies. Direct policies targeting SMEs are a top priority for Labour and the Lib Dems, with the Conservatives choosing a less direct route to supporting the finances of smaller business owners.
An issue that continues to dominate the media, Labour have promised to “declare war” on late payments and will demand that all those bidding for government contracts pay their own suppliers in 30 days. Similarly, the Conservatives will ensure that business that don’t abide by the Prompt Payment Code will lose the right to bid for government contracts. They are also pledging to make one third of all government purchases from SMEs by the end of the next parliament.
What will this mean for SMEs? - It’s interesting to note both Labour and the Conservatives are planning to lead by example and instil good practice in companies that supply to the government. The question of abolishing late payments as an issue is a focus for all parties too, but are they giving out the right message? We believe that businesses should work together more effectively on this, to ensure late payments are no longer an issue for both larger and smaller businesses rather than point fingers.
Both Labour and the Lib Dems have promised to ban zero hours’ contracts, with Labour extending this commitment to unpaid internships as well. Labour also wants the living wage paid to all employees over 18 and grant all workers equal rights from “day one”, including temporary staff.
The Conservatives have proposed to double the Immigration Skills Charge to £2000 per year for each non-EU worker employed by a business. The carrot to that stick is a National Insurance ‘holiday’ for businesses taking on offenders, disabled people and those with mental health issues.
What will this mean for SMEs? - For businesses in certain sectors, a rise in staff costs look highly likely whoever wins, as all three major parties look to stamp out ‘unfair employment practices’. The unfortunate impact will be that SMEs – who do not misuse contract loopholes – are going to be hardest hit by some of the changes, rather than the headline-hitting big businesses that these policies are aimed at.