With Labour’s landslide victory in the 2024 UK general election, significant changes could be on the horizon for small businesses. So, what impact will the new government have on small businesses in the UK? From stability in taxation to addressing late payments and struggling high streets, Labour’s policy commitments promise a range of potential benefits and challenges.
Stability and Taxation
Labour plans to keep corporation tax at its present 25%, providing predictability and facilitating long-term planning for small businesses. They also intend to change the expense system for capital investments, allowing businesses to deduct the full cost of capital expenses. Understanding how to capitalise on these opportunities is vital, and using local expertise from a Stroud business advisory service can steer you in the right direction.
Addressing Late Payments
Late payments are a significant issue for small businesses, often leading to cash flow problems. Labour has pledged to tackle this by enforcing stricter reporting requirements for large companies regarding their payment practices. This initiative could help expose late payers and hold them accountable, potentially unlocking £20bn in unpaid invoices.
Reforming Business Rates
Labour’s plans to reform the business rates system aim to level the playing field between high street businesses and large online retailers. This overhaul is expected to help smaller retail businesses compete more effectively. According to ITN Business this could rejuvenate local economies.
Energy Initiatives
The new government will also establish Great British Energy, a new clean energy company. This project promises to reduce business energy costs, although this is a long-term project so there may not be immediate benefits for small businesses. However, Labour’s focus on green initiatives could create new opportunities for businesses in the green energy sector. Stroud business advisory services can offer guidance on how small businesses could benefit from any new government initiatives such as this.
Overall, the outlook seems positive. The new government brings a mix of stability, support and opportunities for small businesses. By understanding and adapting to these changes, small businesses can position themselves to thrive in the evolving economic landscape.
