Primark Pestle Analysis

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One of the political factors that affect Primark is corporation tax. Companies are subject to corporation tax, which is levied on business profits and other forms of income, as well as on chargeable gains accruing to companies. Corporation tax is charged on the profits of 'financial years' which run from 1 April. For financial year 2014, companies with taxable profits of up to £300,000 pay tax at a 20 per cent small profits rate, with marginal relief up to £1.5m. Companies with profits of £1.5m or more pay tax at the full rate of 21 per cent (23 per cent for financial year 2013). All these limits are reduced where there are associated companies. However, we can see that the government has reduced the corporation tax by 2 per cent because in…show more content…
Another political factor which could affect Primark is fiscal and taxation. All these taxes affect businesses in different ways. Income and National Insurance is levied on income and it affects Primark because an increase in income tax would lower the consumer spending. Higher income tax may also reduce the incentives for employees to work. Next is corporation tax which is levied on business profits. This affects Primark because it reduces the profits available to retain and reinvest into the business. VAT is levied on spending by households; however, it does not affect Primark because there is not VAT on clothes. Lastly, capital gains are levied on profits from shares and it affects Primark because it reduces benefits from financial investment. High interest rates and inflation are harmful in that they discourage investment. For instance, with inflation, workers may start demanding the increase in salary. Similarly, a strong currency may discourage exports by raising their prices in terms of foreign currency. However, economic growth facilitates smooth running of a company’s operations. In UK, Primark is well-known for substantially contributing towards National

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