Tory majority: what it may mean for business and tax

The results are in and Boris Johnson and the Conservatives have emerged from the general election with a substantial majority.

Political commentators are predicting a Budget from the new government early next year and small business owners will be looking with interest to see what measures it will contain for them. And which of its manifesto pledges are turned into action.

During the campaign the Conservatives committed to helping small business through a range of measures, including helping firms with spiralling labour costs and expected Living Wage rises by increasing the Employment Allowance from £3,000 to £4,000.

The party also said it would end the late payment crisis by introducing a reform package put on pause by the election.

The Tories also spoke of extending and expanding existing business rates discounts, while launching a review aimed at reducing the financial burden of rates.

Tougher new anti-tax avoidance and evasion legislation may also now been on the cards along with a review of the support given to the self-employed.

The Tories have committed themselves to no increases in the rates of income tax or national insurance. They have said VAT will also remain at the current rate.

They have also pledged to increase the threshold at which national insurance starts to be payable to £9,500 from April 2020, with the aim of increasing this to £12,500.

And they spoke of a one-year national insurance holiday for firms hiring ex-service personnel.

When it comes to corporation tax, as previously announced by Prime Minister Johnson, the planned cuts to corporation tax next April, from 19 per cent to 17 per cent, will be put on hold.

A rise in the amount of tax relief provided to companies undertaking R&D was also on the party’s agenda, with a proposal to increase the R&D tax credit rate for large companies from 12 per cent to 13 per cent.

While no plans were unveiled for any significant changes to Inheritance Tax and when it came to Capital Gains the Conservatives proposed to review and reform Entrepreneurs’ Relief.

Other changes we may see include the introduction of a stamp duty land tax surcharge of three per cent for non-residents purchasing UK residential property.

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