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As the 2024 UK General Election approaches, many business owners and high net worth individuals find themselves in a precarious position. The choice between the Conservative and Labour parties (because, let’s be honest, the other parties aren’t really worthy of discussion) presents a dilemma, with both sides offering little solace for those seeking stability and incentives to generate wealth and invest in the UK. This election, marked by significant economic and political uncertainty, prompts a critical reassessment of business strategies, including the possibility of taking operations offshore because neither of the main parties are truly backing UK businesses and small to medium-sized enterprises (SMEs).

For years, the Conservative Party has been synonymous with business-friendly policies, promising lower taxes and less regulation. However, recent developments have cast doubt on their commitment to these principles. Under the leadership of Borris Johnson, Liz Truss and now Rishi Sunak, the party has grappled with the aftermath of Brexit and the economic shocks from the pandemic. These challenges have led to the highest tax burden in 80 years and increased public spending.

In the 2024 manifesto, the Conservatives pledge to continue supporting businesses, but with caveats. There are commitments to infrastructure investments and skills developments, as well as promises to keep VAT thresholds under review and abolish national insurance (NI) for small to SMEs, but these are offset by a reluctance to cut corporate taxes further. The uncertainty surrounding the UK’s regulatory framework post-Brexit continues to concern business owners and for many, the fear is that the party’s promises may not translate into tangible benefits, leaving them grappling with more red tape, less financial freedom and increased invasion of privacy.

In this current election campaign, Sunak has spent more time looking to bring down the other parties rather than focus on his own manifesto and imploding cabinet team. His repetitive statement that ‘the plan is working’ is something that is very open for debate for more reasons than not. If he had this same passion and dedication to his position throughout his time in power, maybe said statement would be true.

On the other hand, the Labour Party under Sir Kier Starmer has shifted to a more centrist stance compared to previous leadership. While this pivot aims to appeal to a broader electorate, it still raises red flags for the business community. Labour’s proposals for increased taxation on high earners and corporations, coupled with plans for expanded public spending and more stringent regulations, are seen as potential threats to profitability and operational flexibility. Paired with this, Labour’s aim to close what they call ‘non-domiciled tax loopholes’ and apply VAT rates to private school fees feels more like legal theft than ever before.

Starmer’s Labour has vowed to support SMEs through targeted funding and initiatives aimed at fostering innovation and growth, however these pledges are shadowed by broader economic policies that could increase the tax burden and operational costs. For high-net-worth individuals and larger businesses, the prospect of higher capital gains taxes and more aggressive tax enforcement is particularly concerning.

Similarly to his opponent, Starmer seems to be wasting his breath and focusing on taking down the incumbent prime minister, rather than highlighting the policies they would bring to power. Why can he not directly challenge Sunak’s assertion that Labour would impose around £2,000 worth of tax? If this is indeed untrue, is it not better to place effort into showing and confirming this, rather than launching more personal than political attacks on the opposition?

One potential avenue for businesses to mitigate the impact of potential policy change is to move it to an offshore location. In recent years, an increasing number of high wealth UK residents and businesses have been drawn to offshore opportunities. Four key factors to consider when looking at different potential locations are speed, privacy, the local tax regime and the reputation.

You need to ask yourself; does the location have swift and streamlined processes for company formation and business operations to establish a presence rapidly. Does it offer a commitment to corporate confidentiality and a secure environment for businesses? What are the current tax rules and regulations, and do they allow your business to maximise profits and allocate resources efficiently? And does the location have a positive global reputation for being business friendly and progressive?

Neither the Conservative or Labour parties offer clear, unequivocal support for the business community, leaving many to consider offshore strategies as a means to safeguard their interests for years to come. It feels, more so in recent years, that the wealth creators in the UK are forgotten. This year’s election results could go either way, but the public has never felt more disenfranchised or uninspired. Have any of the parties offered anything to deserve the votes of the public? No. Do the leaders offer a confidence that shows they could lead the country? Also no.

The current landscape and election campaign feels largely like a circus, with each party leader grasping around for pointless jabs against the other, whilst adding little to no useful information and insight into what they would do should they come into, or remain in, power. This personal vendetta they both appear to have does nothing to give the public confidence that either leader is in a fit position to lead the country.

Nonetheless, the decision to take a business offshore should be driven by a comprehensive analysis of the potential benefits and risks, tailored to the specific circumstances of the business. In these turbulent times, seeking expert advice and exploring all available options is not just prudent, it is essential.

Turner Little and its affiliates do not provide tax, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.