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What will a new Government mean for you and your business?
Following a change in Government, we have reviewed the Labour Party manifesto, and produced a high-level summary of the key points that may affect you and your business.
By Andy Gibbs, ATT, CTATaxation
Labour’s manifesto promises not to increase Income Tax, National Insurance, VAT rates and the main rate of corporation tax.
The manifesto is surprisingly light on firm tax commitments, so speculation on future changes will continue until further details are provided, most likely in an additional budget or fiscal announcement.
In terms of what we know, the manifesto contains the following proposals:
- Increase of 1% to the higher rate of Stamp Duty Land Tax (SDLT) (England & Northern Ireland) on residential property purchases by overseas buyers
- Changes to carried interest, which will impact managers at hedge funds and private equity firms
- Removal of the VAT and business rates exemptions for private schools, along with anti-forestalling legislation
- Abolition of the non-domicile taxation status and changes to offshore trusts and inheritance tax
- Retainment of permanent full expensing capital investment and the Annual Investment Allowance.
- In England, Labour will replace the current business rates system
Whether Labour will make other changes remains unclear, and it should be noted that change can bring both pitfalls and opportunities.
We will be keeping a close eye on future announcements and update you, so you remain well informed.
For now, we wouldn’t recommend that you make drastic changes to avoid a problem that may or may not arise as a result of a future event. Although tax is one factor to consider, we recommend you ensure any changes meet your overall business objectives and we’d always caution against making changes simply because tax rules may change in the future.
Employment law
In the run up to the General Election, the Labour Party had been working on a set of proposed reforms to employment law, and while many of the fine details are missing, there are several key changes which represent a radical shift from current practices for employers.
These changes include proposals to provide unfair dismissal rights and statutory sick pay from day one of employment and the effective banning of zero-hours contracts.
The manifesto contains the following proposals:
- Day-one rights - removing qualifying periods for basic rights including:
- protection from unfair dismissal
- sick pay
- parental leave
- Make flexible working the default from day one for all workers where reasonably feasible
- Strengthen statutory sick pay (SSP)
- Strengthen existing rights and protections for pregnant workers, whistleblowers, workers made redundant, workers subject to TUPE processes and workers with a terminal illness
- Introduce the right to bereavement leave for all workers
- Make the minimum wage a genuine living wage and remove current age bandings
- Ban zero-hours contracts
- End of “fire and re-hire” and “fire and replace” practices
- Require large employers with more than 250 employees to produce menopause action plans
- Enact changes to close gender, ethnicity and disability pay gaps
- Have a simpler framework to differentiate between workers and the genuinely self-employed
- Strengthen rights and protections of self-employed ‘workers’
Note that the above are currently just proposals, and you should wait for further details to be published and digested to understand how your business may be affected. If you believe your business will need further assistance in this area, TaxAssist can refer you to Employmentor, who offer a specialist employment law service.
Business regulation proposals
- Take action to ensure small businesses are paid by customers on time
- Improve guidance and remove the barriers to exporting for small business
- Make it easier for small and medium sized enterprises to access capital
- Open up competition to public contracts, giving small businesses greater opportunities to bid for work
Landlords
Labour gave advance notice that they plan an ‘overhaul’ of regulation of the private rented sector but again, until the fine detail is published, landlords and tenants will need to wait for further specifics to be available.
Many landlords will be keen to understand the proposed timeline of change and for the Government to ensure reasonable time is provided to adapt to any changes.
It should be noted that all the main parties had committed to ending section 21, so called no-fault evictions. What matters to landlords is that the new regime is fair to both renters and landlords and balances the rights and obligations of both parties.
The manifesto contains the following proposals:
- Abolish Section 21 ‘no fault’ evictions
- Greater powers for tenants to challenge rent increases
- Take steps to raise housing standards
- Enact changes to the current leasehold system
- Review ground rent charges
- Ensure homes meet minimum energy efficiency standards by 2030
How TaxAssist Accountants can help
If you are not sure how the General Election affects you, speak to your accountant today. Call our friendly team on 0800 0523 555 or use our online contact form and we’ll call you back.
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Date published 5 Jul 2024 | Last updated 17 Jul 2024
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Andy Gibbs, ATT, CTA
Andy is a qualified Chartered Tax Adviser (CTA), holds the STEP Advanced Certificate in Trust and Estate Accounting, and has dealt with both tax compliance and tax advisory projects across a range of industry sectors. He joined us from one of the big four accountancy firms where he looked after the affairs of high-net-worth individuals and private equity executives. Prior to this he worked at a local regional practice where he dealt with the affairs of owner managed businesses and private individuals. In January 2024 Andy was promoted from Head of Group Technical, to Director of Services, leading two of our Group companies which provide payroll and tax consulting support to our network of accountants. Andy also manages a highly qualified and experienced team providing technical support and offering practical solutions in relation to the accounting, tax and practice needs of TaxAssist franchisees and staff.
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