As the general election approaches, a recent survey by the Federation of Small Businesses revealed that 96% of small business owners and self-employed workers plan to cast their vote.
Bionic’s small business comparison experts, interested in hearing directly from small business owners, created an online forum and over 150 small business owners participated to share their opinions. The full press release is below, but here are just two of the major policies and changes they were requesting:
- A review of the current tax system – The general consensus among business owners was that the current system is too complicated and not designed to promote SME growth. The main changes that companies want to see are:
- More needs to be done regarding large corporations that exploit tax loopholes
- Raise or eliminate the VAT threshold to promote growth
- Increase the allocation of tax-free dividends
- Lower corporate tax to 10%
- Eliminate or reduce NICs for employees
- IR35 scrapyard
“VAT is a cliff edge that when it came I had to let go of my staff. It wouldn’t have been so bad, but paying NI employees also crippled me. It’s hard to compete against big companies. There’s no incentive to grow as it’s a lot of stress for little or no profit.” – SME owner involved in the forum
- Policies that promote consumer spending – The general consensus from business owners was that consumers having more disposable income to spend is key to small business success. Many called for an increase in the minimum wage to £15 and policies that focus on reducing household costs.
““It would be nice to see if a change of government increases consumer confidence,” said one SME owner who participated in the forum.
3. business rates – One of the main points of discussion among small business owners was the continuation of the reduction of business taxes or their complete abolition; one owner stated that taxes should be 0 for any small independent business located on a main street.
4. Policies that promote international trade – Several SME owners shared their individual difficulties when trying to import and export goods. Highlighted issues include:
- Visa restrictions make it difficult to recruit foreign heavy vehicle drivers
- Crippling costs for suppliers
- Longer delivery times
- Inefficiency of European delivery times
Interestingly, several SME owners said they would like to rejoin the EU to improve international trade.
5. Policies that support the recruitment and retention of personnel – SME owners are calling for policies that reduce friction when recruiting and retaining staff, such as:
- Eliminate or reduce NICs for employees
- Provide free child care to increase the number of highly skilled workers available in the workforce
How could the party’s manifestos affect small businesses?
Now that the two main parties have published their manifestos, we can see which policies relate to what the SMEs surveyed above are looking for:
The Conservatives
- Abolish NI for the self-employed and reduce NI for employees by 2p
- There are no plans to increase corporate tax
- There are no plans to increase corporate tax
- VAT registration threshold to be reviewed
- Investments in infrastructure, such as energy, transport and digital, with main areas of focus including the delivery of high-speed internet, investments in northern cities and rail improvements.
- Childcare support (working parents with children from nine months to school age will be able to access 30 hours of free weekly childcare from September 2025)
- Changes to energy policy, including investment in offshore wind, maintaining an energy price ceiling and introducing smart energy tariffs
Labour
- There are no increases in VAT or personal income tax
- Corporate tax will be limited to 25%
- Investing in new technology for HMRC
- Training opportunities to reduce skills shortages
- Elimination of 0-hour contracts
- Introduction of a “genuine minimum wage”
- Support for new businesses outside London, including changes to the Business Investment Plan and the Seed Business Investment Plan
Les Roberts, Business Comparison Expert at Bionic, commented:
“Small and medium-sized businesses are the backbone of the UK economy, accounting for almost two-thirds of total employment and around half of turnover in the UK private sector.
“But the last few years have been tough as we have lurched from one crisis to another – Brexit, Covid, high energy prices, runaway inflation – all of which have taken their toll on the British business community and economy.
“If politicians are serious about growing the economy, then improving conditions for these businesses should be a priority when making policy decisions. Giving these businesses the means to thrive and ensuring that people have enough money to spend on the products and services they offer would be a boost to the stagnant UK economy.”