On July 4th 2024, the UK held a General Election. This resulted in the UK electing a Labour prime minister for the first time in nearly 15 years.
So what does a Labour government mean for those with UK businesses? In today’s blog we will be diving into the Labour manifesto and the 3 bills that we feel will impact UK employees and employers the most. These have been introduced with more certainty following the King’s speech on 17th July 2024, so here’s our brief summary of worker’s rights, tax and pensions under a Labour government!
Worker’s rights
- National minimum wage – Labour plan to raise the national minimum wage to reflect the current cost of living crisis.
- Zero hour contracts – They also plan to put a ban on zero hour contracts and fire and rehire.
- Strengthen sick pay – Plans to remove the lower earnings limit for statutory sick pay to make it available to all workers.
- Unfair dismissal protection – Commitments to protecting employees from unfair dismissal which will be available for all workers from day one of employment. They also propose protection for new mothers by making it unlawful to dismiss a woman on this basis.
- Reform to the Apprenticeship Levy – Labour have endeavoured to improve employee’s access to skills qualifications in the UK, by reforming the Apprenticeship Levy to a Growth and Skills Levy.
Tax
Labour has pledged to close the tax gap in the UK, with no plans to increase corporation tax from its current 25% rate. They have committed to publishing a roadmap for business taxation within one year of being elected.
- No plans to increase income tax or introduce a wealth tax.
- VAT on private school fees – Labour plan to introduce tax on private school fees.
- Close inheritance tax loophole for ‘non-doms.’
- Crack down on tax-avoiders.
- No rise in income tax, national insurance or corporation tax – this is for both employees and employers.
- Overhaul business rates and review tax reliefs.
Pensions
Labour’s manifesto commits the party to retaining the triple lock, which raises the state pension every year in line with whichever is highest out of wage growth, inflation or 2.5 per cent.
Labour hopes to boost investment, increase pension pots and tackle waste in the pensions system.
- Pensions bill could help the average earner, who saves over their lifetime in a defined contribution scheme, accrue an extra £11,000 in their pension pots.
- Hopes to give savers the best possible returns on their pensions.
- Plans to move private pensions to a ‘pot for life’ model.
There is a lot of change occurring at the moment, so it is normal to have questions about the future. Some of these bills will take a while to be implemented and there are no set dates at the moment. If you have any questions about your business under a Labour government, please get in touch and we will advise the best we can!
Contact us via email at info@future-cloud.co.uk.
