Political factors
Political factors involve the decisions and laws that governments make. These include:
- tax
- laws
- political stability
Governments can raise or lower corporation taxTax paid to the government on the profit made by a company , which will impact on profits. They can also affect businesses by increasing value-added tax on products or business ratesA tax on the properties from which businesses operate
They can bring in new laws like the national minimum wageThe lowest wage permitted by law and the National Living WageThe lowest wage permitted by law for those aged 21 and over. , which impacts on profits and employment rights. Governments can also introduce new health and safety legislation meaning that a business has to change the way it works, for example by training its staff.
The vote to leave the European Union, also known as BrexitThe process by which the UK leaves the European Union has had an impact on the way UK firm’s trade with the EUEuropean Union single market. The impact may be negative (a loss of trade with EU customers) or positive (less restrictions placed on firms by EU lawmakers).