In the early hours of the 5th of July, Labour’s landslide victory was announced, with the party taking 326 seats. For voters up and down the country, this victory marks a celebration, a breath of fresh air, and a hopeful future. But what does it mean for businesses?
As leading providers of company secretarial services, we are interested in the fine details: the promises of tax stabilisation, the support for small businesses, and how our clients will be affected by these changes.
In this article, we are looking into how the change in the UK government will impact business owners and the key factors they need to be aware of. We will also explore how our services can assist you during this transitional period. With over 30 years of experience, we have been at the forefront of government changes and are more than equipped to provide support during this shift.
A Look into Labour’s Manifesto
While nothing is certain when it comes to the changes that Labour will implement, the best we can do at this stage is dig into their manifesto, as this is the most reliable benchmark of policy changes. Here are some of the main takeaways for business owners to take note of:
- The party has stated they will not raise National Insurance, VAT or Income Tax.
- ‘Exploitive’ zero-hour contracts will be banned.
- Age bands on the National Minimum Wage will be removed.
- They plan to reduce the gender pay gap.
- Focus on roads and railways to assist businesses; specifically, they plan to bring railways into public ownership.
These are just fragments of the entire manifesto, so now we will explore in a little more detail what this means and how these changes could affect your company.
Stabilising Tax
According to the manifesto, one of Labour’s main promises is to stabilise tax, increasing the certainty that they believe has been missing in recent years. To do so, they want to commit to capping Corporation Tax at the current rate of 25% and not raising National Insurance, VAT, or Income Tax. This would provide business owners with peace of mind and more predictability when it comes to the end of the tax year, allowing them to plan better.
Alongside this, Labour also plans to tackle the tax gap by focusing on larger businesses; in fact, according to HMRC’s official tax gap report, this is the business size that contributes the least to the tax gap. This will mean that corporations of this size (more than 250 employees) must prepare themselves for increased scrutiny.
How Will Workers’ Rights Be Affected?
The party plans to increase workers’ rights from day one, meaning that from their first day, employees will have access to the rights they currently would have to wait two years for. This includes:
- Parental leave
- Sick pay
- Safeguarding against unfair dismissal
- Ending of ‘fire and rehire’
- Removal of ‘exploitive’ zero-hour contracts
While these are positive changes for the employees and work to protect them in the workplace, it does mean that business owners will need to take time to reevaluate their employees’ current contracts and make changes where necessary. This should be prioritised early on, as Labour has stated they would like to implement these changes to workers’ rights within the first 100 days of being in government. However, as we said earlier, nothing is certain at this stage.
What Will Happen to Those Who Are Self-Employed?
In recent years, it has been highlighted that one of the most prominent issues for self-employed people is late payments. Whether you are a supplier, a freelancer, or another business type, being self-employed often means chasing payments, which can lead to stress, anxiety, and financial uncertainty.
Labour has stated that these unique challenges must be addressed and estimates that there are currently over £20 billion of unpaid invoices to small businesses and self-employed persons at any one time. They plan to tackle this by requesting annual reports from large businesses to outline their payment practices.
How Does Labour Plan to Improve Equality in Businesses?
Along with all the changes above, Labour has also outlined its plans to improve equality in businesses, which include:
- Taking action on the gender pay gap.
- Introducing a Race Equality Act.
- Supporting disabled people by introducing the right to equal pay and improving access to reasonable adjustments.
Business owners should already comply with existing equality laws and regulations, but to ensure they create a comfortable and safe environment for everyone, there are certain considerations:
- Implement a workplace policy to address inclusion, diversity, and equality.
- Provide equal pay.
- Offer diversity and inclusion training.
- Ensure you are practising unbiased recruitment.
Your workplace culture also speaks volumes about your stance on equality. Ensure your equality measures are transparent to help employees feel comfortable and able to speak up should there be an issue.
Industry-Specific Changes to Be Aware of
While the above items will affect almost all businesses across the UK, regardless of the industry or company structure, Labour has highlighted several sector-specific manifesto points; let’s take a look.
- They plan to provide £1.5 billion to new gigafactories to position our automotive industry as a world leader.
- £2.5 billion is set to rebuild the steel industry.
- Labour would like to investigate the sizeable increase in car insurance policy costs.
- There are plans to work with the farming industry to improve environmental land management schemes.
At this stage, the best thing you can do as a business owner, regardless of your industry, is to keep a close eye on the changes. As mentioned, these are currently proposed ideas, and nothing is set in stone. So, while the above may sound great for your business, it is important to remain vigilant and prepare for the changes to the law, legislation, and various factors that will affect your business and its employees in the upcoming months.
How Can CRO Help Businesses Through This Transitional Period?
At CRO, we are leading providers of corporate secretarial services, meaning we offer business support services that ensure corporate governance, functional administration, and compliance with legislation, laws, and regulations. This means that when there is a shift in government, we are at the forefront, helping business owners work through what they need to do to comply with the changes.
Outsourcing secretarial duties such as statuary records for accountancy firms, ensuring Companies House deadlines are met, or declaring dividends, for example, means you can rest assured that you are compliant.
There is no better time than now to take advantage of our services. Get in touch with our team today to discuss your needs and discover what we can do for you.
