The results of the recent UK elections have introduced several policy shifts and regulatory changes that will likely impact businesses across various sectors. Whether you are an international company, a charity, a property agency, or a professional practice, understanding these changes is key to making informed decisions.
In this blog, we will break down the main areas where the election outcomes could affect your business and offer practical advice on adapting.
A single Budget
The announcement of the Budget on 30 October marks a significant shift in the UK’s fiscal policy framework, with the decision to move to a single annual Budget. This change, introduced by the new Labour government, is intended to provide greater stability and predictability for businesses and the wider economy. By reducing the frequency of fiscal announcements, the government aims to create a more consistent economic environment, allowing businesses to plan and adapt with greater confidence.
The move to a single Budget means that businesses will need to pay close attention to the October announcement, as it will set the fiscal and regulatory agenda for the entire year. Without the opportunity for mid-year adjustments, companies must be proactive in assessing the potential impacts of Budget measures and incorporate these into their long-term planning. For example, any changes to tax policy, public spending, or business regulations announced in the October Budget will have immediate and lasting effects, making it crucial for businesses to engage in early analysis and strategic adaptation.
Policy changes impacting businesses
The election results have led to changes in several key policies that directly affect businesses. These include adjustments to corporation tax, new environmental regulations, and changes to employment laws. For the 2024/25 tax year, here are the main areas to focus on:
Corporation tax rates: The government has confirmed that the corporation tax rate will remain at 25% for businesses with profits over £250,000. This rate applies to the majority of large and medium-sized companies. However, a small profit rate of 19% is retained for companies with profits of £50,000 or less, providing relief for smaller businesses.
Practical advice: If your business falls into the higher tax bracket, consider reviewing your tax planning strategies to ensure efficiency. This might include exploring available tax reliefs, such as the Annual Investment Allowance (AIA), which allows you to deduct the full value of qualifying assets from your profits before tax.
Environmental regulations: The government’s focus on sustainability has led to the introduction of stricter environmental regulations. Companies will now face more rigorous reporting requirements, especially concerning their carbon emissions and sustainability practices. The new regulations align with the UK’s broader commitment to achieving net-zero carbon emissions by 2050.
Practical advice: Review your business operations to identify areas where you can reduce your carbon footprint. Implementing energy-efficient practices helps the environment and can lead to cost savings. Consider conducting a sustainability audit to understand where improvements can be made and how to comply with the new regulations.
Employment laws: The election has also resulted in changes to employment laws, focusing on workers’ rights and benefits. For example, there are proposals to increase the minimum wage and enhance protections for gig economy workers. Additionally, there may be new requirements for businesses to provide more flexible working arrangements.
Practical advice: Ensure your business is prepared for potential changes in employment law. Review your contracts and employment practices to ensure they comply with the latest regulations. Consider how flexible working could be incorporated into your operations, as this could help with compliance and improve employee satisfaction and retention.
Impact on international businesses
The election results bring challenges and opportunities for international businesses operating in the UK. The government’s stance on trade and foreign investment will influence how businesses engage with international markets. For the 2024/25 tax year, pay close attention to the following:
Trade agreements: The election may lead to the negotiation of new trade agreements, especially with non-EU countries. These agreements could provide new opportunities for UK businesses to expand their export markets or could impose new tariffs that affect the cost of imports.
Practical advice: Stay informed about any new trade agreements that may impact your business. If your business relies on imports or exports, consider how changes in tariffs or trade regulations could affect your supply chain. It might be wise to diversify your suppliers or explore new markets to mitigate risks.
Foreign direct investment (FDI): The government has indicated a focus on attracting foreign direct investment to the UK, with potential incentives for businesses that invest in innovation and technology.
Practical advice: If you are considering expanding your operations or investing in new technology, explore any incentives or grants that may be available to support your investment. This could help offset costs and improve your business’s competitive edge.
Charities and property agencies
Charities and property agencies are also likely to be affected by the election outcomes, particularly in areas such as funding, regulatory compliance, and market dynamics.
Charity funding: The government’s budget allocation will directly impact the availability of charity grants and funding. There may be a shift towards funding initiatives that align with the government’s policy priorities, such as those focused on social care, education, or environmental sustainability.
Practical advice: Charities should stay updated on government announcements regarding funding opportunities. Consider aligning your projects with the government’s policy priorities to increase your chances of securing grants. Additionally, diversify your funding sources to reduce dependency on government support.
Property market dynamics: For property agencies, the election results could influence the housing market, particularly if there are changes in housing policy or interest rates. For example, any initiatives to increase housing supply could affect property prices and rental yields.
Practical advice: Monitor housing policy developments and interest rate trends closely. If your business involves property investment or development, consider how these factors might impact your strategy. Adjusting your portfolio or exploring new areas of the market may be beneficial.
How we can help
At Langdowns DFK, we understand that the election results can create uncertainty for businesses. Our team of experts is here to provide tailored advice and support, whether you need help navigating tax changes, adjusting your business strategy, or ensuring compliance with new regulations.
We can assist with a range of services, including tax planning, sustainability audits, and international business advice. Our goal is to help you make informed decisions that support your business’s growth and success in the post-election environment.
If you have any questions about how the election results might affect your business, or if you need assistance with adapting to the new policies, please get in touch. We’re here to help you every step of the way.
