What an exciting week last week with a hung parliament causing an almighty stir for the nation! We now know who the new government is; however, we are still not fully aware of how it will function. The Liberal Democrats and Conservatives are now working together to govern the country. But, what will this mean for small businesses?
There is to be a budget within 50 days of the new Prime Minister, David Cameron, taking over. PAH Accounting will, naturally, advise you as and when the date is announced!
With them being the majority party, it is worth looking at what the The Tory’s proposed in their election manifesto:
- Cut Corporation Tax. The small Company rate will reduce from 22% to 20%.
- All new businesses that start up within the first two years of Government will be exempt from Employers’ National Insurance on the first ten employees they hire in their first year.
- There will be a reduction in the number of forms required to register a new business – It is planned to move to a fully online ‘one-click’ style registration system.
- Simplification of business taxes – set out a five year road map for the direction of business tax reform.
- Small business rate relief is to be automatically applied.
- Create several diverse sources of available credit including proposals for a larger but simplified Loan Guarantee Scheme.
This all seems very good; however, it is being widely reported that VAT is going to increase to 20% by April 2011. This may be a staggered rise. This will have a significant impact on both the buyer and the seller. Not only from a cost point of view but also an administration problem.
It is all a case of suck it and see, but hey, don’t forgot to come here next Budget day for more live blogging and tweeting!