It’s official: Liz Truss has now taken office as UK Prime Minister, having defeated former Chancellor of the Exchequer Rishi Sunak in the race to succeed Boris Johnson.
But for the typical business using the services of an accountant in Wellington, Newton Abbot or Plymouth from a company like TS Partners, what else will change for them with the change in leadership – and what might stay the same?
Few new Prime Ministers have faced such an intimidating in-tray
To say that Ms Truss, who served as Foreign Secretary in Mr Johnson’s administration, faces a mammoth set of challenges would be quite the understatement.
Households and businesses alike are gravely concerned about escalating energy costs adding to an already-dire cost-of-living crisis, while inflation in the UK is also hovering at around 10%, and the Bank of England has already predicted a recession.
The new Prime Minister has declared that she has a “bold new economic plan that will cut taxes, grow our economy, and unleash the potential of everyone in our United Kingdom.”
But is the reality of Liz Truss in Number 10 likely to live up to the promises for small businesses? Multiple key stakeholders have already weighed in with their thoughts.
Firm action looks certain to be taken on the energy crisis
At the time of typing, Ms Truss was on the verge of announcing details on how her Government would tackle the energy crisis. Reports have suggested that alongside the typical household energy bill in England, Scotland and Wales being capped at around £2,500, some relief will also likely be extended to businesses.
In a Twitter post on 8th September, ahead of the announcement, the Prime Minister said she would “deal hands-on with the energy crisis”, by taking “action to make sure people are not facing unaffordable energy bills and to secure our future supply.”
Alan Thomas, UK CEO at Simply Business, has said that “small businesses need assurances that the [new] government has clear and robust plans to support them through what is set to be a bleak winter and beyond. Rising energy prices and soaring inflation will have devastating effects on businesses across the UK, not least our SMEs.
Could new PM’s ‘low-tax’ positioning lead to meaningful reductions for businesses?
Another key focus of Ms Truss’s campaign for the Conservative Party leadership has been a lowering of taxes. She has declared that she will reverse the increase in National Insurance, prevent the previously planned rise in Corporation Tax, and overhaul business rates.
However, with such tax cuts looking set to cost tens of billions of pounds annually, questions are being asked about how she will pay for such an agenda and whether tax cuts of this nature are even greatly effective at promoting business growth.
What about IR35 – will the promised review go ahead?
Another aspect of Ms Truss’s leadership campaign that we’ve previously written about here at TS Partners, is the vow she made to review the controversial IR35 rules. However, this pledge has been met with scepticism from many observers, not least given that it was also made by the Conservatives in their 2019 general election campaign. The Government eventually proceeded anyway last year with changes to the off-payroll working rules for the private sector.
In fact, one recent poll of 476 contractors – as reported by Accountancy Age – found that 94% of those polled considered Ms Truss’s IR35 review pledge to be an “empty promise”.
However, the popularity of the notion of ditching IR35 – if this were to come about – is clear. In the words of Dominic Wade, the co-founder of a specialist finance and accountancy recruitment firm quoted by Accountancy Age, the rules are “one of the most ill-conceived pieces of legislation ever to be inflicted on UK business.”
Whether you are presently working with an accountant in Wellington, Plymouth, or Newton Abbot to support your business’s growth and you are looking to do so, our team at TS Partners is available to talk. Simply email or call our experts today to learn more about how we could assist your firm.