The impact of a new Labour government on UK businesses

The 5^th of July 2024 saw the UK usher in a new Labour government, an event that has seen the business community poised to navigate a landscape of anticipated changes in policy, regulation and economic priorities.

Amongst the changes, it is expected that there will be a shift in the business environment driven by Labour’s commitments to social equity, environmental sustainability and economic transformation.

The Ellis & Co team has taken a look at what exactly the new government will mean for UK business finance…

The impact on business tax

Labour’s manifesto covered many areas of interest for businesses, including the party’s significant commitment to ensuring greater stability and certainty when it comes to business taxation.

More specifically, the party has suggested that it will cap corporation tax at 25% for the span of its parliamentary term in an attempt to provide predictability. Ultimately this would allow for more accurate long-term planning and more informed decisions on investments.

The manifesto also outlined enhanced annual investment allowances which, for many businesses (particularly SMEs), would make capital investments much more financially viable. Furthermore, a new tax roadmap is set to be introduced which would include a full expensing system for capital investments. What this means is that businesses would be able to deduce the entire costs of capital expenses, which may encourage reinvestment and modernisation within companies.

These are just some of many ways in which the Labour government’s plans will impact the business world. We also expect to see changes with regards to infrastructure, investment, employment, the environment and skills shortages, to name just a few.

Keep up to date with any changes that may impact your business by following Ellis & Co on LinkedIn. Or if you’re looking for support and advice on your business’ financials, get in touch with our expert team today on 01244 343 504 or email info@ellis-uk.com.