What the snap election means for small businesses
Harmful legislation may be written off when Parliament breaks on Wednesday
Small business owners might finally have something to celebrate when Parliament moves into recess on Wednesday. During the parliamentary break, known as purdah, central and local Government are blocked from making any policy announcements or changes in the interest of a fair election battle.
British business owners, pensioners and expats in particular will be hoping that as MPs turn their attention to the campaign trail, potentially crippling legislation will be moved from the table onto the shelf, and from the shelf into the bin.
For once, time is on the business owner’s side. Passing legislation is often drawn out over months, if not years, and any new policies must be scrutinised and debated in depth. But with just a month to go until the election, open discussions will be postponed or possibly canned completely.
Hope for the one-man bands
The Chancellor Philip Hammond made a surprising U-turn after announcing his Spring 2017 Budget. Coming under heavy fire from business owners and trade bodies, he revised his plans to increase National Insurance contributions for business owners and make changes to the way bosses are taxed on dividends.
Many business owners – especially one-man bands – pay themselves through dividends rather than salaries because it is more tax efficient to do so. At the moment, the first £5,000 of dividends is free of tax. Under the Chancellor’s proposed plan, this would have been slashed to £2,000 from April 2018.
“With this measure set to be shelved as Parliament is dissolved to make way for the election, small business owners across Britain will be breathing another big sigh of relief”, said Alistair Bambridge, partner of Bambridge Accountants.
Business owners and freelancers of an older, technophobic generation will be pleased to hear that the deadline for moving their tax administration online will go on hold.
Making Tax Digital has been puzzling business owners since the plan was announced in 2015. But now it seems that the way records and declarations need to be submitted will continue to go unclarified until well after the general election.