Member Article

Election 2015: Surrey businesses tackle the EU, corporation tax and support for SMEs

In the third week of our Election 2015 regional coverage, we approached businesses in Surrey to give comment on the biggest date in the political calendar.

In the company’s ’Manifesto for Innovation in the United Kingdom’, Jack Bedell-Pearce, managing director of Byfleet-based hosting provider, 4D-DC said:

“Providing apprenticeships is not just a matter of recruiting young people and leaving them to learn on the job. For apprenticeships to have a real impact on the UK economy, the apprentices need to be properly trained both within the workplace and in many cases supported with outside specialist courses.

“Many start-up businesses are an ideal training ground for apprentices but in the early years of a business, losses will be incurred. Although external training costs are an allowable expense, most SMEs in the start-up phase will not pay Corporation Tax in the early years when cash flow is critical.“James Wyatt partner of Surrey-based estate agent Barton Wyatt, said: “Non-dom abolition. This is a good headline grabber for Labour. Tax the naughty rich who hide their vast piles of money overseas.

“The reality is rather more complicated, if only because no-one knows what the overseas income and assets of the UK based non-doms consists of. Least of all, how non-doms might react to this proposal.

“An upside of £1bn extra to the treasury is one estimate, but if enough non-doms pack up are leave the UK, there could be a net loss.

“By their very nature, non-doms are well advised, and there are plenty of measures they could take to avoid paying UK tax. But will they leave? Yes, plenty will.

“Mansion tax. There is generally misunderstanding about this proposal. Labour wants us to believe this is a tax on the stinking rich. But in fact, it is a tax on the wealthy, many of whom don’t roll around in piles of cash. For example – wealthy Home Counties family in a heavily mortgaged house worth £5m. Kids not burdening the state by being privately educated. Annual holiday might stretch to a couple of weeks in Devon. Mansion tax of £23,000 (let’s say) out of taxed income? Impossible.

“However, Mr ‘Russian’ who owns £10m house, as well as 3 others, mansion tax of £83,000 – not a problem. He is wealthy AND rich! But how many of these type of people are there? Not many.

“50% tax rate. The evidence is all there. A lower ‘top’ tax rate will encourage entrepreneurial types to invest in business. We have 0% inflation. We need investment and jobs. Not extra taxes.”

Jill Pinner, chairman and founder of Fizz, a Dorking-based field marketing company, said: “As a business owner I would like to see some integrity from a political party. I think it’s time that the government realised the importance of honesty.

“Small and medium sized businesses pay numerous types of tax and employ lawyers and accountants to ensure they are on the right side of the law. However it seems that large corporations get off lightly when found to be avoiding their responsibilities on this front. I would like to see a fairer system put in place so that SMEs are not punished for doing the right thing.”

Richard Morley, director of European Development at Epsom-based Liquid Finance, said: “At Liquid Finance, we specialise in helping UK micro businesses grow & prosper, by providing quick & flexible business finance. The forthcoming election is therefore hugely pertinent and at present, looks very unpredictable. We are seeing some nervousness from our customers in the run up, specifically in relation to the UK economy and where it might be headed.

“Overall, we want the new government to stop neglecting millions of UK micro businesses. Micro businesses continue to be the powerhouse of the UK economy, playing a crucial role in leading the country out of recession. They demonstrate tangible economic recovery providing real jobs, real wage growth and entrepreneurialism. We believe more attention needs to be paid to the genuine ‘Small Business’ community.

“These businesses run into the millions, but in truth, are not represented within the various initiatives being run for the so called ‘SME sector’. Micro businesses represent the shopkeepers, hair dressers, publicans, restaurant owners, MOT garage owners and more. These businesses form the backbone of our local communities, yet are constantly neglected by governments, regardless of who, because individually they are not considered vote winning.” “In the forthcoming election we would like to see:

• A reduction in red tape and a recognition of the importance of micro businesses to communities and local trade. We would also welcome support enabling micro businesses to join the digital economy, benefiting from all it has to offer. A reduction in business rates would help that journey.
• Improved tax relief on all forms of business investment, as well as on research and development, would provide real incentives to invest and grow. The application of improved taper relief and an increase in the inheritance tax threshold, would provide even greater impetus for micro businesses to take a longer term view of their business investment, as well as promoting a sense of being valued. In addition, allowing enhanced pension provision through the business assets would be a real driver of change.“

Casey Bowden, MD at Woking-based Harvey Water Softeners said: “The number one thing I want from the election is stability. Being able to rely on that would give peace of mind to business owners like me in the medium and long term.

“After that, I’ll be hoping for a continued focus on improving infrastructure, growing the economy and reducing the deficit. I think that the Conservatives will be the best people to deliver on these aims.”

Director at Faith Recruitment in Woking, Nikki Formella, commented: “Regardless of how close to call the forthcoming election may be, what is certain is that the next five years will be a period of changes for businesses here in Surrey, no matter which party gets the keys to Number 10.“First there is the question of whether the UK remains a member of the EU or not. This will create a certain degree of uncertainty over the next 12-18 months or so, with most of the UK’s exports going to Europe. So any move to break ties with the EU could negatively impact on Surrey-based businesses that export goods overseas.

“Secondly, the question of Europe goes hand in hand with the issue of immigration – it remains unclear whether EU nationals will continue to have the right to work in the UK.

“We have only recently recovered from the recession but there remains an element of nervousness – should Mr Miliband get into power, we will see changes to the minimum wage (Labour wants to raise it) and temporary workers. This could put pressure on SMEs – the greatest source of employment opportunities in Surrey.

“However, away from the doom mongering, the good news for small businesses in the region is that each of the main three parties recognise the importance of SMEs to the wider regional and UK economy and their role in creating jobs and stimulating growth. So we are likely to see greater support for and ensuring access to government schemes.

“Access to finance is expected to be increased and the issue of late payments, which have been the bane of local businesses since time immemorial, will be addressed with a series of clamp down measures introduced which will inevitably see fewer local businesses shut up shop”

This was posted in Bdaily's Members' News section by Ellen Forster .