Small business employs around 16m people in the UK. But bot Tory/Lib Dem and Labour have no inclination to help them prosper. Continous regulations on stakeholder pensions, local planning, ESG, Net Zero, minimum wage rates and more – then there’s the tax take. Just 8 years ago Directors could take £6000 each in dividends tax free each year from a small company, now it’s a big fat zero. CT rates have risen from 19% to 25% under the Tories. The Budget is rumoured to have a hike in CGT tax rates in it, so any exit from a successful biz after 20 years of risk taking, will see the government take 30, maybe 35% of the sale price.
These are not taxes that you can avoid easily if you’re a small limited company to LLP. The VAT threshold needs to rise from the pitiful 90K turnover level too, as a 200K turnover is far more realistic.
Of course if you’re a big corporate, who is domiciled offshore, with IP your domiciled and paid in another jurisdiction, then things are peachy by comparison. No problem on dividends and shareholdings replacing actual wages for senior staff, which is more effiecient that paying 150K a year in cash.
The rumour is that public sector employer NI contribs will be frozen and private company ones will rise – if so, that is a disgusting kick in the face for everyone who risks their own capital pursuing their dream – large or small scale. Level the playing field.
Some might think the plan is to destroy small business completely, so that everyone is dependent on the State, either via a public sector/charity/quango job, or living on means tested benefits. That is not a functioning economy, but rather a Soviet style vassal State.
Here’s the word from Simply Business, who make the case for entrepreneurs and start-up companies;
A Simply Business survey of 1,750 owners ahead of the election revealed that 47% felt a change in Government away from the Conservatives would make them more hopeful about the future of their business, with Labour singled out as the party who best represented the interests of small businesses.
Bea Montoya, COO, Simply Business says: “The Budget on 30th October will be the clearest signal yet for whether the small business community’s hope, trust – and vote – in the Labour Party was vindicated. The UK’s entrepreneurial spirit is unparalleled, but the worrying truth is many are on the brink. Our research shows that one in four SMEs fear closure if trading conditions do not improve. Small businesses are desperate to know that they’re being heard – with particularly urgent support needed around tax relief, regulatory simplification, and financial support. With our collective economic prosperity in the balance, we urge the Chancellor to create the conditions for small businesses to thrive, before it’s too late. We will all feel the benefit.”
SME quote: Kenny, Founder and director, Poli & Jo says: “The next government that comes in needs to action policies that will support us. We are prepared to roll up our sleeves – we’re a headstrong bunch – but we won’t support leaders who don’t wholeheartedly support us.”
Case studies: Simply Business has a fast direct line into small business owners across the country, who can share their perspective into how the policy updates will impact them. Please do get in touch if you’d like to hear these voices.
A united voice: small business pleas for priority policy
Data gathered from survey of nearly 2000 UK SMEs
- Alleviate our tax burden and VAT
A complex and expensive tax system makes it difficult for SMEs to thrive at a time when the cost of running a business has never been higher. 27% would like to see cuts to corporation tax, and 44% an increase in the personal allowance for income tax. But the biggest call, for 50%, is a plea to simplify the system. Successfully reducing costs would allow SMEs to expand (42%), take on more staff (29%), focus more on innovation and product development (34%).
- Help us get paid – tackle the £32 billion late payment crisis
89% said the previous Government didn’t do enough to tackle late payments, with many having to resort to bank loans and personal savings to stay afloat. 39% think the new leadership should provide guidance and financial support for businesses struggling with late payments, with 50% looking for stricter governance for corporates on this topic.
- Prioritise our mental health
Almost half (47 per cent) of small business owners have experienced poor mental health over the past 12 months, with financial worries cited as one of the main causes. 90% say the Conservatives didn’t do enough to support the mental health of the self-employed. 61% want access to a flexible statutory sick pay scheme, and 33% are asking for a central mental health service specifically for the self-employed.
- Help bring our beloved British High Street back to life
An overwhelming majority (94%) of SMEs believe the Government has a vital role to play in revitalising high streets and local economies. 33% say the Government should invest in infrastructure to make high streets more attractive to shoppers, 27% want to see business rates scrapped, and 22% want to see grants, loans or tax incentives for independent retail businesses.
- Support us to deliver on the green agenda
There is a clear expectation for the Government to step up, and lead the way towards a greener future. 83% believe they should encourage small businesses to adopt environmentally-friendly practices, and 43% want to see tax breaks or subsidies for SMEs who invest in sustainable and energy-efficient technologies. 18% would like to see our country’s leaders doing more to educate small businesses on greener practices.
- Boost our access to business funding
Excessive regulation and a lack of availability have made this hard going. 90% agree that the Conservatives didn’t do enough to help with small business funding. 43% are looking to the new Chancellor to reduce red tape, while 30% would like to see the Government introduce low interest loans.
- “Do more to tackle the energy crisis
After the Energy Bill Discount Scheme ended on 31 March 2024, many businesses have been left worrying about making ends meet each month. To minimise the impact of high energy prices for small businesses, 49% would like to see the energy industry subject to more strict governance, and 31% say SMEs should be given extra financial support or tax breaks if they’re struggling to pay their energy bills.
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