Yesterday we looked at the pledges of the Labour Party which are most pertinent to contractors. Today we do the same; looking at the pledges of the Conservative Party with regards to tax, the economy and business.
As we are already aware, the Conservative Party have vowed to review the taxation system for small businesses, including the IR35 rule. Of course, just last week we heard from a Party representative that this is unlikely to include the abolition of IR35. They also plan to create an independent Office of Tax Simplification whose role will be to make suggestions on tax reforms. The Conservatives are also planning to lower the corporation tax applicable to small businesses to 20%. Their manifesto also states that they will “stop the most damaging part” of the increase in NICs planned by Labour. Also, with regards to NICs, they are planning to raise the primary and secondary earnings thresholds by approximately £20 per week while year one trading companies will receive a waiver of their NIC contributions for their first ten employees. As a result of the NIC thresholds increase, the Upper Earning Limit will also increase.
The Conservative Party also plan automatic relief for small businesses and they will award powers to local councils to apply rate discounts. Headline Corporation Tax will also be cut to 25%. They do not plan to keep the 50p per month landline tax as outlined in Labour’s manifesto – to fund ‘Digital Britain’.
With regards to the recovery of the economy, the Conservative Party plan to hold an emergency Budget within 50 days of taking office, if they win the General Election, the aim of which is to set out their plan for eliminating the majority of the structural budget deficit. They then pledge to act quickly to cut said deficit. They aim for the British economy to be less dependent on financial services and, instead, lead on technology, science and innovation. They have vowed to favour low interest rates and protect the UK’s credit rating. Again, they are planning to create an independent Office for Budget Responsibility with the aim of restoring public trust in the government’s handling of the country’s finances.
Private businesses can expect a boost in their share of the economy. They have also pledged 25% of Government procurement contracts to SMEs. With regards to , they are planning to implement the recommendations of Sir James Dyson regarding how to ensure Britain is Europe’s top hi-tech exporter. They will also ensure that all tender documents for contracts worth £10,000 or more will be published online. The Conservatives have also pledged to ease the ‘red tape’ which is faced by many businesses by applying the ‘one in, one out’ approach to new rules.
The Conservatives will, however, plan to freeze all spending on major ICT projects within the public sector. They will also have a tight control on all public sector recruitment. They have pledged to cut discretionary spending on expenses, travel and consultancy services. They will be splitting the larger governmental IT projects into smaller parts to go through the procurement process. Finally, public sector pay will be frozen for one year in 2011 but this will exclude the 1m lowest paid workers.