The Conservative Party’s Promises for Small Businesses
According to a recent survey by Touch over 40% of those operating small firms in the UK are intending to vote Tory on the 6th May. Just as significantly, over 71% of those surveyed said their experience of running a business had a direct bearing on their voting choice. This means that they take very seriously the commitments that the political parties make in their manifestos.
Touch have put together this short guide to the Conservative’s plans as set out in their manifesto and which have attracted the support of so many of those running the country’s SMEs.
A National Loan Guarantee Scheme First proposed in late 2008, as the recession began to bite, the scheme could underwrite a significant percentage of new bank loans to business. It would be used to provide a diverse range of borrowing options aimed at business while helping financial institutions by allowing them to share risk.
Changes to National Insurance From 2011 both employees and employers will be paying 1% more in National Insurance contributions. The Conservatives will counter this by raising the limits at which National Insurance is paid by employees and employers. This means 70% of workers will be around £150 per year better off, and most employers will benefit by £150 per person.
In addition, some new firms will be exempt from Employers’ National Insurance on their first 10 employees, for up to a year. This will apply to businesses set up in the first two years of a Conservative government.
Making it Easier to Start a Business In order to foster the spirit of entrepreneurialism the Tories will introduce a Work for Yourself programme that supports start-ups. They’re also aiming for a ‘one-click’ registration model for business registration, cutting much of the red tape surrounding the formation of a new firm.
Corporation Tax Cuts and Simplification The present rate of Corporation Tax is 28%, or 22% for small businesses. The Conservatives will cut these to 25% and 20% respectively and their manifesto expresses the hope that they can reduce them further in the future.
These cuts will form part of a larger reassessment of the tax structure, driven by a new and independent Office of Tax Simplification, whose job will be to look at the current taxation system, including those aspects that affect businesses, and recommend ways of reducing the tax burden and its associated bureaucracy.
Better Access to Government Procurement Contracts The Conservatives want to make it easier for SMEs to get a bigger share of the £200 billion per year government procurement market. Their aim is to have small and medium-sized firms delivering 25% of research and procurement contracts. One way they’ll do this is by breaking large ICT projects into smaller components to increase the opportunities for smaller firms to bid for them.
Other Manifesto Commitments Here’s a short summary of some other Tory promises that will have an impact on small businesses:
- Make small business rate relief automatic.
- Improve research and development tax credits.
- Maintain the minimum wage.
- Looks at ways of abolishing the legal retirement age.
- Give SMEs a £2000 bonus for each apprentice that they employ.
- Put curbs on the amount of new regulation imposed on business.
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