Conservatives win landslide majority: Accountants reactby
The 2019 election delivered a resounding victory for the Conservative Party, and the accountancy community reacted with demands for an immediate Budget, stability for business and tax reform.
The Conservative Party has won a handsome majority of 76 seats in the first December election since 1923.
The scale of the victory surprised both voters and commentators, with Boris Johnson’s message of a quick exit from the European Union and freezing the main tax rates chiming with the electorate and securing his party its biggest majority since the 1980s.
While much of the relatively short Conservative manifesto concentrated on the benefits of leaving Europe, accountants will note that the party has promised to freeze the rates of NIC, VAT and income tax, as well as reform the insolvency rules and the audit regime.
In the run-up to the election, Chancellor Sajid Javid also promised a full review of the new off-payroll (IR35) rules for the private sector. However, any evaluation would need to be conducted quickly given the rules are due to come into force in April.
Commentators have also cast doubt on how much the result will actually change tax policy, with one expert commenting to AccountingWEB that the scale of Conservatives' majority will give HMRC carte blanche to continue rolling out a programme of tougher enforcement, including the new IR35 rules, the Loan Charge and further avoidance measures.
When the first indications of the result broke at 10pm via an exit poll, the pound surged to an 18-month high, jumping by more than two cents against the US dollar and a similar percentage against the Euro. Traders put the rise down to market relief at a functioning majority government and room for the Prime Minister to ignore hard Brexit elements of his own party when it comes to EU negotiations.
AccountingWEB members took to the Any Answers forum to express their views on the result. Reader ‘thegreatgrumbleduke’ called for the Tories to “get a Budget date sorted, fix the broken mess that is the tax system, and get on with providing the business community with some actual stability”.
And long-term member JDBENJAMIN expressed relief and delight at the vote. “It means I will not in the coming years have to refer loads of clients to specialists in insolvency or in the tax effects of emigration,” they commented. The comment reflected the views of many readers who took to the comments section of AccountingWEB's Labour Party manifesto write-up to express concern about its content.
Professional body AAT was quick to call for reform, with its head of public policy Phil Hall asking a new government to give “serious consideration to reforming Stamp Duty” and to “thoroughly examine how to improve the effectiveness, fairness and simplicity of inheritance tax”.
Meanwhile, accountant and professor of political economy Richard Murphy pondered what the future may hold for a Conservative majority government. “First [Boris] Johnson might let Scotland go as it does nothing for him,” said Murphy. “And he will do a very soft Brexit to keep people happy. And lots of Labour policy may now be adopted to overcome the probable intense disappointment many new Tory voters will feel.”
To check how accountancy's parliamentary prospects got on, head to AccountingWEB's candidate write-up.