Jeremy Corbyn has announced plans for a number of major small business reforms in an attempt to woo the UK’s self-employed voters.
Speaking at the Federation of Small Businesses, Corbyn championed small business, while attacking larger firms who ‘stop small businesses from growing’.
- 7 of the best business bank accounts for 2017 compared
- Why Brits love being self-employed
- Revealed: where small businesses will be hit hardest by the business rates rise
- What is business insurance?
With the Conservative Party traditionally holding the small business vote, left-wing Corbyn has put forward plans that would boost the smallest businesses and turn the spotlight on bigger companies currently blocking their growth.
What does Corbyn plan to change for small businesses?
Having recently announced plans to bring in the £10 minimum wage, Corbyn drilled into the issues currently facing the self-employed in Britain at the FSB. From tax returns to payment issues, it’s believed that Labour’s small business focus will form part of the party’s overall growth strategy, placing the self-employed at the heart of the economy.
War on late payment
Corbyn’s trump card (note the lowercase ‘t’) is his plan to crackdown on late payments to small businesses.
It’s estimated that up to 80 per cent of small businesses are owed money, showing the scale of the problem.
“It’s a national scandal,” announced Corbyn. “And it’s stopping businesses from growing and causing thousands to go bust every year. It kills jobs and holds back economic growth.”
The Labour leader also went on the attack against bigger firms who fail to pay on time - including the likes of Vodafone, Marks & Spencer, and BT Group.
“No small business owner should go begging to the banks or even remortgaging their homes just because a customer considers themselves too big to pay on time,” he said. And he’s got a point - late payment is currently driving 50,000 small firms out of business each year.
Cutting red tape for the smallest of businesses
In another move that will appeal to microbusinesses, sole traders, and the self-employed, Corbyn plans to scrap quarterly tax returns for businesses with a turnover of less than £83,000, ‘allowing owners to focus on growing their business’.
According to the FSB, Making Tax Digital will cost the average small business £3k a year, so don’t expect to see any arguments from small businesses owners over the proposals.
Regional development banks
Continuing with his plans, Corbyn revealed his intentions to level the playing field between small and larger businesses.
He’ll raise corporation tax, but keep small businesses exempt, while introducing regional development banks to fund entrepreneurs and startups.
Late payment: small businesses wait 72 days on average for pay
So, Corbyn’s planning an all-out assault on the late payment ‘scandal’ currently facing small businesses. But how big of a problem really is it?
Well, huge. Small businesses wait an average of 72 days for payment, often leaving them with cashflow problems, as well as difficulty paying staff, managing stock, and investing in marketing.
In fact, small businesses list the issue as one of their biggest challenges, and with owners often lacking in legal expertise, can find it difficult to know how to avoid the situation.
Corbyn’s plans mean any company bidding for a public sector contract will be bound to pay its suppliers within 30 days. But is 30 days soon enough? Let us know below.
Looking for self-employed insurance?
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it’s public liability insurance, professional indemnity or whatever else you need, we’ll run you a quick quote online, and let you decide if we’re a good fit.