In the early days of the new political shift to a Labour government, we take a look at some key topics that might affect your business in the coming months:
When it comes to tax, Labour say they intend to simplify the tax system for both individuals and businesses. One of Labour’s main pledges in its manifesto is to keep the current corporation tax level at 25% for the next five years, making it the lowest in the G7.
The Annual Investment Allowance was introduced under Gordon Brown’s 2008 Labour government as a means of allowing businesses, irrespective of their size or power, to deduct 100% of a qualified asset from all profits before tax is calculated on said profit.
Labour has promised to keep this allowance in place, which currently allows up to £1m worth of assets to be claimed for. Labour has yet to confirm if it will retain this current value, but it’s likely to be the case.
The concept of full expensing was introduced in Spring 2023 under the last Conservative government. It was brought in alongside a wide range of changes that businesses faced in that period, such as the increase in corporation tax.
Full expensing was thought to cushion the blow brought about by increases in corporation tax, allowing businesses to deduct 100% of the cost of capital equipment in the same year in which it is bought, as opposed to spreading this cost across numerous years.
Labour has promised to retain this system in its new government.
At present, businesses aiming to open physical establishments on high streets are liable to pay inflated rates on things like water, electricity, and tax. Labour believes this system to “disincentivise investment” in the high street and has therefore proposed to replace the system with one that is fairer, while still “raising the same revenue”. No specific plans have been laid out yet, but Labour wishes to “tackle empty properties and support entrepreneurship”.
There are five substantial changes that Labour has said it intends to deliver that will affect both employers and employees:
Aldermore wants to support businesses to achieve more. You can find out all about our products by visiting our business savings and business finance pages today.