Keir Starmer joined the party political debate but never really explained to the nation how he planned to set the future for UK businesses.  With previously rising corporate tax rates, this is at the forefront of business owners minds.

Labour are selling  themselves as the party to bring about change. With the uncertainty of the looming general election, lets explore the impact that Labour’s policies could have on UK SME’s.

Their manifesto has pages dedicated to the “kickstart of economic growth”, but what does this mean?

Corporate rates of tax are to be capped at their current level of 25%. They believe that this will allow businesses to plan. It is not clear from their manifesto whether this will be a blanket rate or whether they will retain the rate if 19% for businesses with profits < £50,000.

The capital investment tax breaks that have been in place will remain with the Annual Investment allowance having more details around it to clarify what qualifies for businesses looking to invest.

The business rates system will see significant changes. There is an intention to “level the playing field” between the high street and the online giants.

When specifically discussing the smaller businesses and the self-employed, there is very little in their manifesto. The key points they have noted are:

• Action will be brought against late payers to protect smaller businesses from cash flow issues;
• A reform in the British Business Bank will make access to capital easier;
• Procurement rules will be reformed to give them access to government contracts

Their manifesto refers to “a genuine living wage” . For all businesses employing people, it is again not clear what this could look like. Any rise to the living wage will ultimately put up the wages bill for employers, and will see a rise in prices to remain profitable. This may not have the desired effect as it will push prices up across the board and those relying on a living wage may not find themselves any better off.

It will be interesting to see how the nation votes in a weeks time.

 

**please note that  the above is in no way a representation of my political views and is merely a review of their manifesto