What does a Conservative Majority mean for Small Businesses?

At the start of May, the nation witnessed another general election, but instead of it resulting in another hung parliament followed by a two-party leadership, the outcome saw a majority conservative government. While some people lamented the news, others rejoiced. Changes are to be made for the country, particularly with an extensive chapter on SMEs drawn up in the manifesto. So what does the new government have in store for the next five years, and how can small business owners benefit from these changes?

Red Tape

The Tory government plans to cut the red tape by £10 billion within the next five years. This means less paperwork at tax time and an overall harnessing of bureaucracy. Not only does that keep current SME business owners content, but it will also entice more people to open up their own small businesses. Moreover, George Osborne plans to drive down corporation tax and freeze VAT, as well as vowing to increase Personal tax allowances.

The Help To Grow Scheme

Cameron proposes to launch a new scheme which will help 500 of the UK’s fastest growing, medium-sized firms to expand further. By receiving support from the British Business Bank, there is an estimate of an annual £1 billion funding gap to be pledged. This new scheme is to emulate Germany’s Mittelstand model.

This is fantastic news for the chosen few, but what about other companies that might be starting off or only have a small annual profit? The party has also pledged to treble the number of start-up loans given out. This could reach up to 75,000.

Employers Rights

The Beecroft Report, formulated in the last government suggested an in-depth review of employment legislation. Cameron plans to continue on with the Beecroft report by giving employers greater flexibility in the hiring and firing of their employees. It also means that employers have a reduced risk of being taken to an employment tribunal or potentially being sued.

In the past, the Beecroft Report has been considered controversial and some legislations were overruled by the Lib Dems in the past. Now with a majority conservative party, politicians are free to implement laws that have previously been dismissed.

Business Secretary, Sajid Javid intends to crack down on late payment by introducing a small business conciliation service. This will also help settle disputes between small and large businesses as well as avoiding any expensive legal costs.

Employment Allowance

Employment allowance allows employers to reduce the amount of National Insurance contributions (NICs) they pay for their employees by up to £2,000. This was first introduced in April 2014 and the new government plans to keep the employment allowance in place until 2020.

If you would like to know more about how your business can benefit from the new government, contact an accountant today. Aston Black Accountants can give you the best advice available. Contact us today to find out how we can benefit your business.

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