The lead-up to the election was filled with the inevitability of a hung parliament that was expected to result in a period of uncertainty and delays whilst any coalition formed, or worse a re-election was called. The results of the election have eased all of those concerns somewhat, with the Conservatives easing their way back to Downing Street for another term.
However, now that those fears of uncertainty and delays have been dispelled, what does the result of the election actually mean for businesses in the UK?
The initial suggestion is positive. British stocks opened higher and sterling surged this morning. Sterling was up +2 per cent versus the euro and on course for its biggest daily rise since January 2009. The FTSE100 is also forecast to start +130 at 7017.
The Conservatives announced a number of measures in the Budget 2015, which are focussed primarily at helping small businesses. Some of those measures include:
(a) plans to abolish the annual self-assessment tax return and replace it with a digital tax account;
(b) a review of the business rates system;
(c) the “Google Tax”, which is a diverted profit tax aimed at discouraging large companies, such as Google, Starbucks, Apple and Amazon, from diverting profits out of the UK to avoid tax;
(d) reducing the main rate of corporation tax to 20%; and
(e) abolishing Class 2 national insurance contributions.
Further details of the measures announced in the Budget 2015 can be found here.
The Conservatives’ manifesto didn’t highlight any other significant plans which may affect businesses but it is expected that further details relating to the review of the business rates system will be announced in due course.
Overall, I expect that the majority of businesses in the UK will be reasonably happy with the results of the election. Uncertainty and instability can be damaging to a business, with the inability to make definitive plans for the future. However, the promised “in-out” referendum of the EU planned for 2017, which was key to the Conservative pledge may still cause uncertainty for those businesses in the UK which rely heavily on the trading arrangements in place within the EU and the effect of that will remain to be seen in the next two years.
If you would like to discuss how the results of the election might affect your business then please don’t hesitate to get in touch with one of our corporate solicitors on 0845 050 1958. Alternatively please complete an online enquiry form.