UK Small businesses are likely to benefit from the new coalition government. It is hoped that it will create more certainty amongst small businesses and encourage growth as a result of the new policies to be introduced in helping to takle the UK’s deficit.
The Federation of Small Businesses (FSB) believes that since the Conservative and Liberal Democrat parties have both managed to make compromises this has created a very positive outlook for the future of the UK and has safeguarded business confidence around the country.
Both the FSB and the British Chambers of Commerce (BCC) have welcomed the government’s agreement to scrap the planned rise in National Insurance Contributions (NIC). Both groups have also welcomed plans to increase the tax free threshold on income tax to £10,000.
David Frost, The Director General of the BCC, commented:
“Fixing the public finances must be at the top of the agenda. The Conservative-led coalition must be absolutely clear about where spending cuts will fall, and about the need to curb relentless growth in the size and cost of the public sector.”
The FSB National Chairman, John Walker, stated that the FSB are “pleased that coalition negotiators have listened to the business community.”
Mr Walker added:
“A healthy increase in personal tax thresholds is something that FSB has been urging for some time. This will not only provide more disposable income for the lowest paid workers, but will also encourage businesses to take on more staff.”
The BCC and FSB, amongst other business groups, have also called for “concrete proposals” to help reduce administration and costs as well as tax burdens on business.
Nigel Lockett, of Bradford University school of management, also believes that this new coalition could prove to be beneficial to UK businesses.
Mr Lockett believes that with the Conservative’s focus on the markets, reducing the country’s deficit and taxation on business as well as the Liberal Democrat’s focus on supporting business regulation and social enterprises the country could undergo a major overhaul and be pulled kicking and screaming into a new era of economic growth and stability.
See below for Mr Lockett’s “top ten” predictions:
1. Banks: Legislation to split investment from retail banking. New bank levy. Formation of Post Bank delivered through the Post Office network.
2. Business rates: Automatic business rates relief for small businesses.
3. Business support: Reduced role for Regional Development Agencies. Business mentor networks.
4. Economy: Attempts to rapidly reduce national debt in order to increase financial stability.
5. Finance: Increased access to funds from state-owned banks and government schemes.
6. Green: New low-carbon schemes for small businesses.
7. Public procurement: Increase access to contracts for SMEs.
8. Red tape: Reduced regulation and bureaucracy.
9. Tax: Reduced NI and simplification of Corporation Tax. Review of IR35.
10. Training and higher education: Increased apprenticeships and work-based training. Increased university enterprise and collaboration with industry.
To read more please visit Nigel Lockett’s blog.
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