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How Will the UK General Election Affect My Business?

In the next 12 months, there’ll be a UK election to decide the next government. This raises questions for many business owners about how the policies of the main political parties could affect them. In lieu of the parties’ official manifestos being released, we’ll look at the positions of Labour and the Conservatives on key business issues. 

Corporation Tax

If Labour come into power, they don’t want to increase Corporation Tax from its current rate of 25%. Within their first six months, they’ve said they’ll lay out a plan for future business taxation. On the other hand, the Conservatives say they want to ‘back businesses with lower taxes.’ The good news is that either way, it’s likely that Corporation Tax won’t get any higher this year.


Labour have been vocal about wanting to add VAT to private school fees. They want to end tax breaks for independent schools as soon as they can if elected. They’re still to announce more on what regulations they would put into place surrounding VAT for other businesses including where they stand on maintaining the VAT registration threshold at £85,000.  

The Conservatives don’t want to raise VAT or national insurance if they stay elected.

Prime Minister, Rishi Sunak, argues, “They don’t understand the aspiration that people have to provide a better life for their kids. They want to punish them for that as part of some class war. I don’t think that is right.”

Personal Tax

During the Autumn budget, the Chancellor announced tax changes. Class 2 national insurance contributions will be abolished from April 2024. The class 4 national insurance contribution rate will be reduced for the 2024-2025 tax year down to 8% from 9%.

In terms of post-election, the Conservatives don’t want to raise income tax and also have a plan to cut it. They want to raise the national insurance threshold to £9,500 by next year which would create a tax cut for 31 million workers. This would mean that the first £12,570 that people earn is free of tax. But Chancellor of the Exchequer, Jeremy Hunt, said that there’re “no shortcuts to lower taxes” at their Autumn conference. This suggests that their plan’s unlikely to happen overnight.

From the start of 2024, anyone with a side hustle has had to be careful as they’ve needed to report their earnings earlier. This is set to continue for people who use platforms like Airbnb and Etsy. The current trading allowance is £1,000 tax free, meaning if you’re earning over £1,000, it needs to be reported to HMRC.

This could see more people classing themselves as small businesses than ever before.

Minimum Wage

Currently you must be 23 to receive the ‘National Living Wage’, but as of April 2024, 21 and 22-year-olds will also be able to.

The National Living Wage is set to increase to £11.44 per hour for workers who are over 21 from April 2024. This is an almost 10% increase from the current rate of £10.42 – the biggest ever change. The department for Business and Trade predict that 2.7 million workers will benefit directly from this increase.

Minimum wage for young workers will also increase. 18–20-year-olds will go from a minimum wage of £7.49 to £8.60 per hour – a £1.11 increase.

An 18-year-old apprentice will receive an increase more than 20% in their minimum wage pay, which is currently £5.28 an hour, to £6.40.

Jeremy Hunt, said, “Next April all full-time workers on the National Living Wage will get a pay rise of over £1,800 a year. That will end low pay in this country, delivering on our manifesto promise.”

Business Rates

If you have a non-domestic property, you may be paying business rates. If elected, the Labour Party want to make a big change to these. in their words, they’ll be ‘replacing business rates with a system for the 21st century.’ This is part of their plan to support small businesses, particularly those with bricks and mortar buildings. “Tackling late payment and business rates is exactly what small businesses are looking for,” Tina McKenzie, Policy Chair for Federation of Small Businesses has said.

The Conservatives want to reduce business rates by reviewing the current system. They want to start this by reducing business rates for retail. This also includes expanding the discount to small cinemas, pubs, and grassroots music venues.


In 2024, a number of changes have been made regarding migration and visas. For example,  social care workers aren’t able to bring dependants like partners and children with them. Another change is that now if you want to sponsor someone for a spouse/partner visa, the minimum income has increased. This will get higher from £18,600 a year to £29,000, eventually reaching around £38,700.

In terms of the general election itself, both the Conservatives and Labour Party want to focus on border security.

Post-Brexit trade

Brexit has complicated trade with EU countries since the UK left the customs union meaning increased costs and paperwork for importers and exporters. 

The government has since signed trade deals with a number of non-EU countries including Japan, New Zealand and Australia. “These landmark deals squarely deliver on my priorities to drive economic growth, boost innovation and increase highly skilled jobs across the UK, ensuring we and our closest friends continue to prosper for generations to come,” Rishi Sunak said.

They’ve also brought in a new post-Brexit scheme which aims to cut tariffs on products entering the UK from different countries, reduce import costs and more. Whilst Labour have been coy about their plans for trade with the EU, if in government it’s possible a new approach will be sought. Labour are also keen to focus their attention on workers and making sure they’re protected. This could mean new regulations being bought into place.

Artificial Intelligence

AI is slowly taking over our everyday lives. It’s everywhere, with ChatGPT and AI apps being used by many people – some for fun and others in their work lives. Given how widespread it is, it’s no wonder the government are going to have a say on it.

The Conservatives welcomed AI in their white paper in March 2023, and have put principles in place in order to layout regulation. Some of these principles include safety, security, and robustness.

The Labour Party has identified the threat AI possess, but they also welcome it. They want to ensure workers are offered training and protection.

Supply chain issues

There’re many small businesses who supply the government, so in turn, the election may cause concern and uncertainty. Labour wants to set up supply chain taskforce. This will look over what it needs across different sectors which could include energy, food, and construction.

Minister for Industry and Economic Security, Nusrat Ghani, said, “there are many unpredictable events that can threaten our access to vital goods, from the pandemic, Russia’s illegal war in Ukraine, and the ongoing attacks in the Red Sea. That’s why we’re taking action to ensure crucial imports like medicines can reach consumers, no matter what happens around the world.”


There could be more opportunity to bring sustainability into your business. The Government is looking for a long-term solution to encourage businesses to be greener, so we may see something soon.

For example, if Labour are elected, they want to create a plan for clean energy. This includes windfall tax on oil and gas companies on their excess profits to help with the cost of living.

The Liberal Democrats want to invest in renewable power and by 2030 and want 80% of the UK to be generated from renewables. These are all changes which could affect you depending on who comes into power.

High Street Reform

It’s clear that high street reform is an issue. Both parties want to bring growth back to bricks and mortar stores. The Conservatives have put together plans and have stated they’re putting money into trying to save UK shops. They’ve put five priorities in place: giving new life to empty buildings, supporting businesses on the high street, improving the public realm, making sure there are clean and safe spaces, celebrating pride within local communities. Labour has made it clear that they want to help with High Street Reform, but haven’t put an exact plan in place as of yet.

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Olivia Wood, business content writer

Olivia Wood is a writer with hands-on experience in business success. Having made the leap into the world of freelancing, she offers her expertise to help others.

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