The UK General Election is set for 4 July 2024. Amidst the usual hype that accompanies the lead up to such an event, it is a good time to look at what small business owners are likely to get from the next government.
From HR changes to modifications to tax regimes and AI regulation, there is a lot for the small business to take in as we head towards the General Election and a potential new government.
Whilst much of what is being discussed at this time is based on intention rather than promise, there is still merit in exploring what each of the main parties has on their agendas.
Taxes
If Labour takes over, their plan is to keep Corporation Tax at the current rate. Within their first six months in power, they have set an intention to outline a future business taxation regime.
The Conservatives say they are aiming to support businesses by keeping taxes low.
Labour has suggested it will be making changes to VAT on school fees, although they are yet to provide clarity on their approach to VAT regulations in other sectors. This includes the current VAT threshold, which currently stands at £90,000.
The Conservatives have said they have no plans to raise VAT or National Insurance if they are re-elected. In fact, the Chancellor has suggested that his longer term aim would be to abolish National Insurance altogether. There has also been talk of avoiding raising income tax and even aiming to reduce it.
The Labour Party has previously mentioned removing the tax burden for the lowest paid, which could mean an increase in the personal allowance. They’ve also committed to reforming ‘non-dom’ taxation, which affects UK residents with overseas assets and income but who are nationals or long terms residents of other countries.
There could also be changes to R&D Tax Reliefs once the next government is elected. The current government has introduced planned structural changes for this relief, although Labour has indicated it will maintain the current structure to provide stability.
Business Rates
If Labour gets into power, considerable changes to business rates could be on the cards. The party is looking to replace the current system with something more modern, aiming to support small businesses, particularly those with physical premises.
The Conservatives also intend to review and reduce business rates, as well as introducing discounts to certain entertainment venues.
Employment Law
This year has already seen significant changes introduced in terms of employment law. But even more could be on the horizon once the results of the General Election are announced.
The Labour Party has proposed a series of reforms to workers’ and employment rights, including the fairly radical idea of granting full employment rights to all workers from day one of their employment.
Their manifesto has set out around 60 changes, which they have pledged to bring in within 100 days of taking office. Some of these include:
- Stronger rights and protections for pregnant workers, whistleblowers, those made redundant and those subject to TUPE processes
- Increased wages, including continuing to raise the National Living Wage and immediately increasing the Minimum Wage to at least £10 per hour for any workers not already at that rate
- Increasing Statutory Sick Pay and making it available to all workers
- Making flexible working a default right from day one
- Family friendly protections, including extended maternity and paternity leave and reviewing the shared parental leave system
- Strengthening workers’ rights to respond to family emergencies with paid family and carers’ leave and flexible working
- Raising awareness around neurodiversity and modifying workplace provisions for stress, mental health and long Covid
- Extending the time limit for bringing employment tribunal claims and removing the compensation caps
If the Conservatives get back into power, then their already announced changes should continue as planned. Some of these include:
- Neonatal care leave and pay
- Reform of industrial action laws
- A Back to Work plan, including proposals to reform ‘fit notes’
- TUPE reform
Other Bills currently being debated include:
- The Paternity Leave (Bereavement) Bill
- Bullying and Respect at Work Bill
- Fertility Treatment (Employment Rights) Bill
- Unpaid Trial Work Periods (Prohibition) Bill
Although it remains to be seen if any of these will proceed to Royal Assent should the current government remain in power.
Artificial Intelligence
Artificial Intelligence (AI) received a warm welcome from the Conservatives in their March 2023 white paper. The party has outlined principles to set out regulation, including safety, security, and robustness.
The Labour Party has identified the threat that AI poses, but they also welcome the technology. They want to make sure workers are provided with training and protection.
Sustainability
There may be new provisions for businesses around sustainability.
If Labour gets into power, they are looking to create a clean energy plan, including windfall tax on oil and gas companies on their excess profits.
The Liberal Democrats are seeking to invest in renewable energy, and have a vision for 80% of the UK’s energy to come from renewables by 2030.
In summary
Whilst it is still too early to tell which way the General Election will go, it is clear that change is on the horizon, whoever gets into power.
It’s just a case of wait and watch at the moment, and in a month’s time, we’ll have a better idea of what could await us in the world of the small business.
