INSIGHT: What Impact Will the New Government Have on SMEs?
With election promises still ringing in our ears, SMEs would be wise to take a closer look at the manifesto commitments laid out by the new Government in recent weeks. Michael Pitt, partner and head of commercial property at Pearson, explains.
Under the Conservatives, there are major plans in a range of areas from employment to investment in infrastructure, which promises to deliver positive and hopefully lasting benefits to businesses of all sizes.
Whether the wide ranging pledges actually come into force can’t be guaranteed, however, small businesses will be affected on many levels by some of the promises made.
From the chance to capitalise on grants and bonuses, to avoiding falling foul of changes in tax policy and employment law, SMEs must make themselves aware of the possible benefits and limitations of the manifesto.
To make sense of the numerous pledges, here are the main points that will impact SMEs under the new Government.
Tax Policy & Finance
- The Employment Allowance is set to remain until 2020, ensuring that one-third of employers will pay no Employers’ National Insurance. The level for the Annual Investment Allowance is also set to increase.
- The main rate of corporation tax is set to be cut to 20 per cent for small companies.
- Small business rate relief will also become an automatic process and the Government has pledged to undertake a major business rates review.
- Government guarantees will also be used to create new sources of finance for SMEs and start-up loans available are also set to treble in number.
- Default retirement is set to be abolished and new emphasis is to be placed on occupational pensions.
- SMEs have been pledged a £2,000 bonus for every apprentice they hire.
- The self-employed are to be given support to overcome disadvantages such as building up pensions and accessing maternity pay.
- A network of business mentors and a new loans system will help aspiring entrepreneurs to realise their business ambitions.
- Flexible working is to be extended to everyone, with shared parental leave giving extra flexibility to new parents.
Investment in Infrastructure
- £100 billion is to be invested in infrastructure during the next term, with railways and road networks receiving £38 billion and £15 billion respectively.
- The deadline for SMEs to apply for a £3000 grant for superfast broadband connections has been extended to March 2016.
- A “Northern powerhouse” is to be created, with Manchester and Leeds in particular set to receive additional investment.
Small Business Conciliation Service
- The government is taking steps to reduce late payments by introducing a Small Business Conciliation service to mediate in disputes and has also pledged to tighten up the prompt payment code.
To discuss how the new Government’s pledges will impact your business, call one of the experts in our commercial law team on 0161 785 3500.Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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