‘Bad payment practices lead to SME failures’, report suggests

A new report published by the Business, Energy and Industrial Strategy (BEIS) Committee has highlighted how ‘bad payment practices’ have led to the ‘failure’ of many small and medium-sized enterprises (SMEs).

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The government’s Prompt Payment Code, which was created to address poor payment practices, has ‘too often’ been ‘ineffective’, according to the Committee.

A ‘statutory requirement’ for companies to pay within 30 days should be introduced, the Committee stated. It also recommends giving the Small Business Commissioner the power to fine large businesses who pay their suppliers late.

Commenting on the report, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘Eliminating the scourge of late payments would see 50,000 businesses saved each year, [and] add £2.5 billion to GDP, which would be a real boost to UK productivity.

‘The government must respond to this report with tough action on late payments, supporting smaller businesses to further develop their leadership and management capability, and to improve the adoption of basic digital technologies that small businesses need to grow and become more productive.’

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Prime Minister establishes five ‘Brexit business councils’

Prime Minister Theresa May has created five new ‘Brexit business councils’, which will provide UK firms with advice and support in regard to creating the ‘best business conditions’ post-Brexit.

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According to the government, each council will meet three times per year in order to supply ‘high-level advice’ on issues surrounding Brexit and business.

Each council will represent a sector of the UK economy. Sectors covered include financial services; the manufacturing industry and infrastructure; consumer goods, retail and life sciences; telecoms, the creative industry, technology and the media; and small businesses, scale-ups and entrepreneurs.

Ten members will make up each council, including a representative from a leading business group.

Commenting on the new councils, the Prime Minister stated: ‘The UK has always been one of the best places in the world to do business, and is a leader in sectors from advanced manufacturing to the creative industries.

‘Brexit presents a huge opportunity to build a better, stronger economy for people all over the country. So I’ve asked these new councils to advise us on the opportunities and challenges facing business as we shape the UK for the future.’

Many individuals believe self-employment has ‘improved quality of life’, survey finds

A survey carried out by AXA Business Insurance has revealed that a significant number of self-employed individuals believe that working for themselves has ‘improved their quality of life’.

82% of those polled believe that being their own boss has enhanced their quality of life, whilst only 7% believe that working for themselves has negatively impacted on their quality of life.

The survey also suggested that, in regard to mental health in the workplace, just 40% of self-employed individuals experience work-related stress, compared to 60% of those in regular employment.

However, when it comes to starting up in business, the survey revealed that many UK entrepreneurs struggle with their self-confidence: 50% stated that they lack confidence, while 22% reported that mental health issues hold them back from pursuing their business goals.

Commenting on the findings, Gareth Howell, Managing Director of AXA Insurance, said: ‘Some people are attracted to self-employment as a route out of a damaging workplace situation. Whatever your motivation, timing is crucial to success or failure in self-employment.’

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Significant number of UK business leaders ‘in the dark’ about new GDPR

A survey carried out by the Institute of Directors (IoD) has suggested that almost a third of UK business leaders have not heard of the new General Data Protection Regulation (GDPR).

Image result for gdprThe GDPR comes into effect on 25 May 2018, and will strengthen the obligations on all businesses in regard to the safeguarding of individuals’ personal information. Firms must be accountable for their data usage, and must identify a lawful basis for processing personal data.

The IoD surveyed almost 900 businesses and found that four in ten company directors don’t know if their business will be affected by the new data protection rules.

It also discovered that half of directors have not discussed GDPR compliance arrangements with individuals with whom they share data.

Commenting on the findings, Jamie Kerr, Head of External Affairs at the IoD, said: ‘It was clear from the outset that this would be a mammoth task for small and large businesses alike, but the scale of the challenge has not necessarily translated into preparedness for the new regulation, despite the huge costs of non-compliance.

‘It is crucial everyone understands just how big this regulatory change will be for business leaders over the next few months.

‘We urge the regulator to step up its engagement with businesses to ensure that they are spreading the message far and wide.’

Businesses who fail to comply with the GDPR will face fines of up to €20 million, or up to 4% of total annual worldwide revenue, whichever is the greater.

CBI publishes Autumn Budget submission

The Confederation of British Industry (CBI) has published its Autumn Budget wishlist, outlining a range of measures that it believes will help the UK to ‘grow its way out of austerity’.

Image result for confederation of british industryThe business group has highlighted a host of strategies, designed to fuel business investment, spur innovation and promote competitiveness in the UK tax system.

It has called for the government to ensure that business rates ‘incentivise productive investment’, redesign the Apprenticeship Levy to ‘boost productivity growth’ and outline long-term plans for Insurance Premium Tax (IPT) and the corporation tax surcharge, with a view to phasing this out over time.

The CBI has also called for HM Revenue & Customs (HMRC) to be ‘properly resourced’ to ensure that the correct amount of tax is paid at the right time, in order to allow business owners to concentrate on running their business.

In terms of infrastructure, the CBI has urged the government to ‘immediately distribute’ the £490 million Spring Budget pledge to help ‘improve local infrastructure networks’.

Commenting on the submission, Carolyn Fairbairn, Director General of the CBI, said: ‘Faltering consumer and business confidence risks lowering living standards, so it’s important the government sends firms the right signals they need to continue investing and growing.

‘Ministers need to build on the basics to get our economy in shape for the challenges ahead by demonstrating a continuing commitment to free markets, a pro-enterprise environment and maintaining a relentless focus on the drivers of productivity.’

Significant number of UK workers ‘considering setting up a side business’

Research carried out by domain registrar GoDaddy has suggested that a significant number of UK workers are considering setting up a business in addition to working their usual day job.

Nearly a fifth of those surveyed have contemplated starting up a business on the side, GoDaddy revealed.

The survey found that ‘side businesses’ help individuals to top up their income, with some entrepreneurs reportedly earning between £500 and £5,000 on top of the salary from their day job.

48% of those who start up a side business do so to make money from a passion or a hobby, the research revealed.

However, some experts have warned that many have set up side businesses in order to make ends meet. Annie Quick, Subject Lead in Inequality and Wellbeing at think tank the New Economics Foundation, commented: ‘For many more people, this is something they’re being forced to do.

‘We’ve had a decade now of stagnating wages, benefit cuts and increasing prices, so many people are finding that a full-time job is no longer enough to put food on the table and are often having to turn to often poorly paid, insecure employment to top up their income.’

Businesses call on Government to reconsider National Living Wage targets

Businesses call on Government to reconsider National Living Wage targets – Article Gerrards Cross : Nunn Hayward

Business groups, including the Federation of Small Businesses (FSB), have written to the downloadnew Business Secretary, Greg Clark, calling for National Living Wage (NLW) targets to be reconsidered in light of the economic uncertainty generated by the UK’s vote to leave the EU.Introduced in April, the NLW requires employers to pay employees aged 25 and over at least £7.20 an hour.

The NLW is aimed at ensuring that over 25s earn a minimum of 60% of median earnings by 2020. The Government predicts that the NLW rate could potentially rise to over £9 an hour by this time.

However, the 16 trade associations, including the British Hospitality Association and the National Farmers Union, have called on the Government to moderate increases.

Their letter revealed that member companies are having to revise growth, investment and employment plans ahead of the predicted NLW increases.

The business groups also stated: ‘We recommend the Government restores the Low Pay Commission’s powers to objectively assess the impact of the wage increases on businesses, and recommend future living wage and minimum wage rates with regard to their impact on employment opportunities.’

In response to the letter, an official spokesperson for Prime Minister Theresa May stated: ‘The Prime Minister has been clear that we have to build an economy that works for everyone, where people are able to share in the benefits of economic growth.

‘Making sure that people can earn a decent day’s wage is a big part of that.’

Conor D’Arcy, policy analyst at the Resolution Foundation, also commented: ‘By sensibly pegging the NLW to typical earnings, the Government has already built in flexibility to help steer it through choppy economic times.’