By John Coldicutt, CMO of KashFlow
Businesses are feeling increasingly empowered to speak up and make their voices heard, sharing their opinions on what they believe is good for jobs and growth. This was demonstrated in the Scottish referendum where a real difference was made by people being honest and open about what they really wanted.
George Osborne’s Budget speech demonstrated the government’s commitment to supporting SMEs throughout the UK. The abolition of yearly tax returns leaves businesses facing a vastly simplified tax system which frees up business owners time to focus on growth, rather than tedious admin.
With the budget now passed and election season in full swing, it’s time for businesses to take a long hard look at the different manifestos and policies that, depending on the election’s outcome, will affect the way we all do business in the future. As small businesses should be the beating heart of economic growth, what should SMEs be asking ahead of the election as they look ahead to the next five years?
1. Which party will prioritise British businesses if successful in the general election?
Businesses are often overlooked once the election smoke clears, with the focus instead turning to overarching issues such as healthcare and education. However, small businesses are the engine of economic growth, so failing to prioritise this market could have disastrous consequences.
2. Which policies will ensure red tape doesn’t continue to plague UK SMEs?
Despite the UK Government’s continued pledge to cut red tape for British business, in the last year alone the EU implemented 1,139 new laws. Complying to such high levels of legislation takes its toll on SMEs and prevents business growth and although the UK Government has cut £10 billion worth of red tape over the last four years there is still more which needs to be done to support the ever growing world of small business.
3. Who can best support UK businesses to ensure continued economic growth?
Businesses of all sizes require support, from funding and grants, to ensure legislation doesn’t hinder national and international trade. Businesses must question who will support them with increased funding, and also who will investigate less known opportunities such as product development grants. Failing to support British companies will slow not only their growth curve, but that of the economy too.
4. Will there be a party that can further simplify the tax and financial account submission process for small businesses?
Financial management is often an area which takes up the most time for small businesses who can’t afford to or have taken the decision to outsource this to an accountant. This was further complicated on January 1st this year when the Generally Accepted Accounting Practice in the UK (UK GAAP) was introduced. The successful party in May needs to look for a solution to the financial quagmire stopping entrepreneurs from focusing on business growth. George Osborne’s Budget speech was a strong start for example, with yearly tax returns scrapped in favour of real-time online accounts.
5. Who would take VAT reform seriously if successful in this year’s general election?
Controversially, EU reformed VAT in January 2015 which has had a knock on effect on small businesses trading online throughout the UK. Even the smallest online businesses now have to VAT register and keep vast amounts of data on their customers to complete their annual returns. Professional advice from accountants suggests if you earn less than £500/year from the online arm of your business, the time it takes isn’t worth the cost of compliance. This must change.
By considering the above, SMEs will be able to interrogate manifestos and policies to ensure that they make a well informed decision making their vote really matter. Despite many being understandably nervous about the prospect of change, the political parties look to be placing the needs of growing businesses at the heart of their manifestos.