How the change in government will impact UK based SMEs

Labour just won the UK general election by a landslide, beating the Conservatives by 412 seats to 121. Labour weren’t the only winners on the day with the Lib Dems securing 71 seats, a significant increase on the 8 seats the party won in the 2019 general election. 

The 2024 results are all the more dramatic considering voter turnout was the second lowest since 1885, with only 60% of potential voters turning up.

But, what does the new government mean for small to medium UK based businesses?

What do the general election results mean for UK business?

Only time will tell how businesses will fare from these results, however, here are a few possible insights we can glean so far:

• Business rates: Labour plan to assess the fairness of current business rates with the purpose of equalising opportunities for brick and mortar shops, who currently have to pay business rates, and remote e-commerce stores, who usually don’t.

• Corporation tax: The Labour party declared they plan to keep corporation tax at a maximum of 25% for the entirety of their time in office. Currently, corporation tax stands at 25% for businesses earning over £250,000 in profits, whereas it sits at 19% for businesses with profits under £50,000.

• Budgets: Labour declared in February that if they enter into office they would release a budget every autumn – a third of a year before each tax year begins.

• Property: Labour have stated they plan to build 1.5M homes, which could have a significant impact on the property market and property development industry.

• Training: There’s a proposed shift away from the apprenticeship levy towards a Growth and Skills levy which would enable businesses to spend 50% of their contributions on non- apprenticeship training, diversifying training sources.

• Zero hour contracts: While Labour’s February statement promised an all-out ban of zero hour contracts, The Guardian recently reported a loophole in the party’s revised plans that would allow workers to opt into continuing on zero hours contracts.

• Taxes: On the 10th of June 2024, Labour released a statement stating they would not increase income tax, VAT rates, or national insurance if elected.

• Sentiment: In the days following the election, the FTSE 100 experienced a very small dip of 0.5%. However, as of 3 days ago, the FTSE 250 had grown by 1.8%, rising to its highest level in over 2 years. Interestingly, Goldman Sachs increased their growth projection from 1.2% GBP growth in 2025 to 1.8%.

Apply for financing with Funding Options by Tide

If you need some help in navigating this period of transition, Funding Options by Tide is here for you. We help businesses find and apply for suitable funding solutions. From asset finance to the Growth Guarantee Scheme, we work to connect eligible UK-based limited companies and sole traders to our network of over 120 lenders, offering between £1,000 and £20M. Just click the link below and submit your information to start your application.

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Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

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