We know that in the build up to the election 5,000 small business owners signed a letter backing the re-election of David Cameron and the Conservatives. Although some argued this was staged, it was a sign that UK business owners were edging towards supporting a new Tory government.
But which parts of their manifesto lead to this, and how will the new government help UK new start-ups and SMEs?
Reform to Business Rates
During the last parliament George Osbourne announced cuts to Corporation Tax in each one of his four Budgets. In 2013, he committed to cutting the rate to 20% by April 2015, which was introduced earlier last month.
This was part of a wider pledge by the Chancellor to introduce the lowest business tax rates of any major economy in the world.
Easier to Employ People
Small businesses can now claim up to £2,000 off their employers National Insurance bill. ‘The National Insurance Contributions Employment Allowance’ is reported to benefit up to 1.25 million UK businesses and charities. Almost any employer who pays Class 1 National Insurance Contributions on their employee earnings is eligible to claim a reduction.
During the last government a new qualifying period for unfair dismissals was introduced to give further protection to employers. Any employee wishing to claim for unfair dismissal must now have completed two years service with the business, and must begin a claim within 3 months of the employment termination. This has contributed to a 75% reduction in the amount of tribunials.
New Start Up Loans to be Tripled
Over the next five years the Conservative government has committed to increasing the Startup Loans Scheme.
This will see the number of approved loans increase from 25,000 to 75,000, with the total sum leant exceeding £300 million. This will contribute to a further pledge to help create 600,000 new startups a year by 2020.
Originally the scheme was only open to those aged between 18-30, but last year it was expanded and the upper age limit has now been removed.
Moves to Outlaw 60 Day Payment erms
Increasingly large businesses have been utilising unnecessary payment terms as a method of managing their cash flow. Typically UK businesses operate 30 day payment terms, but in recent years the rise of anything up to 60 days has seen small businesses struggle to balance their books.
The new government is committed to tackling long payment terms and completely outlawing 60 day payment terms is a policy they have included within their election manifesto.
Image: David Cameron (Photo Courtesy of The Open University on Flickr)