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What Is The Future For Entrepreneurs Under The Tories?

The Tories are in. Okay what's next? Minutehack's favourite accountant James Poyser wrestles with the various permutations for small businesses like his.

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The Tories are in. Okay what's next? Minutehack's favourite accountant James Poyser wrestles with the various permutations for small businesses like his.

Opinions

What Is The Future For Entrepreneurs Under The Tories?

The Tories are in. Okay what's next? Minutehack's favourite accountant James Poyser wrestles with the various permutations for small businesses like his.

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As a voter, an employer, and a business founder, I followed the election intently. Two weeks on from the surprisingly emphatic endorsement of Conservative policies, I’ve had time to reflect on what a Tory government really means for small business.

Overall I think there’s a lot to be positive about as a SME (small and medium-sized enterprise), from more opportunity to bid for government contracts to strengthening the prompt payment code but, as a number of my clients, from engineering to IT, though actuarial to HR, have pointed out, there are gaps.

Having read all the manifestos, I can see that it’s possible to plug them by ‘borrowing’ policies from the opposition. I’ll explain.

Small business matters

The most heartening reality is that every major party recognised that the small business community wasn’t to be ignored. A powerful force for employment and economic good. The Conservatives perhaps were the most ambitious pledging to increase the number of start-ups to 600,000 a year by 2020, supported by trebling the number of start-up loans.

A worthy move. However, as someone who has gone through the pain barrier of establishing and growing a business, and as a provider of support to people doing the same, it’s one thing to say you’ll help people start-up, it’s quite another to say you’ll help them stay in business.

Rates and red tape

That’s why manifesto commitments such as cutting the regulatory red tape by £10bn, increasing the personal tax allowances, freezing VAT, reducing the National Insurance bill and scrapping NI for under 21s mustn’t be reneged.

Nor must the review into business rates. Labour said it would freeze or even cut rates. I had underestimated the sense of urgency on this one until clients started to discuss the election with me, and overwhelming illustrated just how pivotal it would be in securing their future, especially those operating on the high street. Without a cut in rates many would struggle to grow without a dependency on borrowing.

"The Conservative’s pledge to have 3 million more apprenticeships by 2020 is commendable"

In a similar vein, tax breaks would relieve some financial burden. The SNP put forward the notion to increase National Insurance holidays, in the form of the Employment Allowance, from £2,000 to £6,000. I can immediately name several businesses that would benefit from such a break, expediting the creation of additional jobs. It will be interesting to see if the united SNP presence in Westminster will put pressure on the government to adopt it.

Runways, railways and super-highways

Another hot point for clients was infrastructure. Connecting the major cities and opening up export channels is in huge demand and our competiveness as a nation rests upon it. How airport and rail expansion will manifest itself is still to be determined but the commitment the Conservatives have made is recognised, certainly among my clients, as good for the economy.

For all businesses, an environment to trade online 24/7 with reliable broadband, 4G and 5G across the country is an imperative if not an obligation, especially for rural opportunity.

Many small businesses rely on it to expand their reach – from the exporters benefitting from the Asian fascination of British manufactured goods, to the buoyant freelance community with an overwhelming necessity to deliver a consistent professional service to stay self-employed.

Bottom line is it’s time the government put its money where its mouth is and brought the overall £100 billion infrastructure investment into fruition.

Rights for self-starters

Self-employment isn’t going to go away, and I’m sure that most of the intended 600,000 start-up businesses of 2020 will be one-man bands who use contracting as a stepping stone to forming small businesses that employ others. It’s worth noting that during the crash, freelancing was a common alternative to unemployment.

As our recovery goes from strength to strength I’d like to see an economic environment where self-employment is something people aspire to do rather than need to do.

David Cameron

Penny for your thoughts Dave?

Furthermore, the Conservative manifesto said that there would be a review into the policies that ‘disadvantage’ the smaller business such as better provision for maternity rights, sickness allowances and pensions.

Expectation among self-employed business owners is that it must happen, and should happen soon so that the policies that compromise growth are arrested, and provision is made to assist the deficit some companies may fall into as a result of compliance.

A good case in point is pension auto-enrolment. It’s almost ironic that many employers will be forced to provide employees with a pension, and manage the additional administrative burden, yet not be able to afford a pension themselves.

Promoting Britain’s jewels

Policies put forward by the SNP were also of interest to a number of self-employed contractors, not least the pledge to promote the oil and gas industry. In a nut shell the feedback was that promoting the UK to the rest of the world is a given, but focused initiatives that promote our expertise and innovation in specific fields have real merit and would not only sustain jobs but also propel growth.

Whatever you think about the SNP, the common sense approach to driving the economy, putting Britain back on the map for engineering, design and technology while safeguarding jobs is one many an industry leader would welcome, wherever they are based.

Linked to this is our ability to export home grown new talent in professional services. The Conservative’s pledge to have 3 million more apprenticeships by 2020 is commendable.

But I see an opportunity to do more. Namely offering school leavers an alternative to university and apprenticeships. I believe it is possible to leave school and ‘earn and learn’ to build a professional career, but in order to harness the potential we need to consider more carefully how we nurture aptitude and attitude in our school leavers. I know I’m not alone and I hope that the appointment of Anna Soubry to minister for small business will open this debate up.

Clarity on Europe. Now

Perhaps the biggest thorn in the Conservative’s side. Business leaders from FTSE through to the sole trader will want an end to uncertainty so they can plan their futures.

A number of our clients have expressed concern that a break from the EU would undermine the network of SMEs and contractors that work in industries such as science and engineering, and preclude them from the lucrative contracts they enjoy today.

For small service businesses, such as rising indie software houses, the EU represents a large, accessible and straightforward market in which to do business: contrast this with the complexities of trading with Asia.

That’s not to say some reform of EU policy wouldn’t be welcome. Take for example newly introduced EU place of supply VAT legislation. The goal of this policy may be praiseworthy – to prevent wholescale abuse of the tax system by multi-nationals, but the administrative impact can be crippling for a small business looking to export digital services to the EU.

That’s why we’d welcome the Green party’s suggestion to free small businesses from this unnecessary bureaucracy, alongside a wider review of policies impacting small businesses.

The coalition provided much needed stability and the resulting outlook shows promise. But expectations are high. Finishing the job was the Conservatives mantra, and finish the job they must.

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What Is The Future For Entrepreneurs Under The Tories?

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