WITH THE General Election fast approaching, a recent snap poll by The Federation of Small Businesses revealed that 96% of small business owners and the self-employed plan to cast their vote.
Interested to hear directly from small business owners, the small business comparison experts at Bionic created an online forum and over 150 small business owners got involved to share their opinions. The full press release is linked below but here are just 2 of the main policies and changes they were calling for:
- An overhaul of the current tax system – The general consensus from business owners was that the current system is overly complicated and isn’t designed to promote SME growth. The main changes the businesses want to see are:
- More to be done about large corporations using tax loopholes
- Increasing or abolishing the VAT threshold to promote growth
- Increasing the tax-free dividend allowance
- Lowering corporation tax to 10%
- Removing or lowering NICs for employees
- Scrapping IR35
“VAT is a cliff, which, when it hit, I had to let go of my staff. It wouldn’t have been too bad, but paying employees NI as well crippled me. It’s hard to compete against big companies. There is no incentive to grow as it’s a lot of stress for little to no gain.” – SME owner involved in the forum
- Policies that promote consumer spending – The general consensus from business owners was consumers having more disposable income to spend is key for small business success. Many called for an increase of the minimum wage to £15 and policies that focus on lowering household costs.
“It’d be nice to see if a change in government increased consumer confidence” – SME owner involved in the forum
3. Business rates – One of the main points of discussion amongst the small business owners was the continuation of business rates relief or abolishing them altogether, with one owner stating that rates should be 0 for any small independent high street business.
4. Policies that promote international trading – Multiple SME owners shared their individual struggles when attempting to import and export goods. Issues highlighted included:
- Visa restrictions making it harder to employ foreign HGV drivers
- Crippling supplier costs
- Increased delivery times
- Inefficiency of European supply timelines
Interestingly, several SME owners stated that they would like to rejoin the EU to improve international trading.
5. Policies which support hiring and retaining staff – SME owners are calling for policies which reduce friction when it comes to hiring and retaining staff, such as:
- Removing or lowering NICs for employees
- Providing free childcare to increase the amount of high skilled workers available in the workforce
How could the party manifestos affect small businesses?
Now that the two main parties have released their manifestos, we can see which policies relate to what the SMEs polled above are looking for:
The Conservatives
- Abolishing NI for the self-employed and reducing employee NI by 2p
- No plans to raise corporation tax
- No plans to raise corporation tax
- VAT registration threshold to be reviewed
- Investments in infrastructure, like energy, transport and digital, with main areas of interest including delivering high-speed internet, investment in Northern cities, rail improvements
- Childcare support (working parents of nine-month to school age will be able to access 30 hours of free weekly childcare from September 2025)
- Changes to energy policy, including investment in offshore wind, maintaining energy price cap, introducing smart energy tariffs
Labour
- No increases to VAT or NI
- Corporation tax to be capped at 25%
- Investing in new technology for HMRC
- Training opportunities to reduce skills shortage
- Removal of 0 hour contracts
- Introduction of a “genuine minimum wage”
- Support for startups outside of London, including changes to the Enterprise Investment Scheme and Seed Enterprise Investment Scheme
Les Roberts, Business Comparison Expert at Bionic, commented:
“Small and medium-sized businesses are the backbone of the UK economy, accounting for nearly two-thirds of total employment and around half of turnover in the UK private sector.
“But the last few years have been tough, as we’ve lurched from one crisis to the next – Brexit, Covid, high energy prices, soaring inflation – all have taken their toll on Britain’s business population and the economy.
“If politicians really are serious about growing the economy, then improving conditions for these businesses should be at the front of mind when policy decisions are made. Giving those businesses the means to thrive and making sure people have enough money to spend on the products and services they provide would be a shot in the arm for the UK’s stagnant economy.”
