After the week of politics overload the last thing I guess we want to speak about is the Election!
From a tax point of view it all makes things rather interesting again. We were anticipating a Conservative majority of around 100 seats. In the world of tax what this would have given is the ability to push through a lot of changes pretty much unchallenged. This is something we haven’t seen since the Blair / Brown Labour leadership. With a working majority of 100 seats we had expected the National Insurances rises introduced and then subsequently scrapped in the Budget to come back into force. We had also heard a whisper about a new rate of Corporation Tax for smaller companies – rumoured to be around 23% - 24% and the scrappage of the dividend allowance.
With the hung parliament and a tiny working majority by teaming up with the Democratic Unionists can we expect any of these changes – I certainly wouldn’t think so. As I’ve previously commented I think the small business world will have breathed a huge sigh of relief when the results filtered through on Friday morning. Any changes are now going to be more middle of the road rather than pushed through Parliament.
So what do we know about the DUP and what will they want for their agreement. Apart from being reported as coming across as very old fashioned initially they seem in agreement to the Conservative plan to raise the personal allowance. They are also committed as part of their manifesto to raising household income. This would mean supporting the living wage increase – again an interesting point for small business to consider. Finally they are committed to Brexit however not the hard right stand which Mrs May campaigned so vigorously over. Certainly interesting times ahead for the business community.