Official figures have revealed that only 1,500 new businesses had taken advantage of the new scheme, launched with an aim to rouse enterprise and employment. This is a minor figure, compared to the 250,000 new business bank accountants opened between July and November 2010.
When launched, it was estimated that 400,000 new businesses would benefit from the flagship concession at a cost to £940m to the Exchequer. The holiday relief is worth up to £50,000 for new businesses, which is applicable to a maximum of 10 staff during the first year. However, it seems that the lack of promotion behind the scheme has meant it has remained under the radar for the majority of new businesses.
Start-ups are now being encouraged by accountancy firms to claim for overpaid NICs via the HM Revenue & Customs’ website.
Many accountants have come forward to claim that the scheme was flawed as it was too targeted and specific, making it too difficult for businesses to qualify.
The scheme may be flawed but it could bring some much-needed financial benefits to new businesses and accountancy firms can only continue in giving advice and guidance.
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( 3 / 224 )Confusion over red tape regulations is rife amongst small businesses with many unable to clarify which regulation applies to their business, a new report claims.
The totality of regulations, in particular for small businesses, is complex. They will generally have to consider up to 60 regulations covering areas such as planning, employment and health and safety, which are all governed by multiple official bodies.
The report by National Audit Office (NAO) revealed that many businesses were breaching rules because it was unclear which regulation applied to their business.
Communication between government departments and businesses regarding the red tape they imposed was said to be insufficient and not effective. The Better Regulation Executive (BRE), a body set up to cut the amount of red tape businesses face, said they accepted that more communication was needed.
The total cost the regulations cost to businesses was not available from the NAO report but back in March the BRE estimated it to be £9.9bn over the coming year.
The Federation of Small Businesses remarked that they had problems dealing with regulation because of the constant “churn and change”.
The government have said they want to end ‘tick-box’ regulation and that BRE are getting underway in putting strategies into place to cut back on the cost of regulations to small businesses.
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( 2.9 / 199 )Managers believe working for a small company, rather than a larger organisation, is far better for employee wellbeing, new research claims.
At companies with 50 employees or less, leadership, career prospects, surviving the recession and job security and satisfaction are all believed to be stronger. The survey, conducted by management school Roffey Park, questioned 1,500 managers at all levels from organisations of various sizes.
Employees from smaller companies were also more likely to feel “less cautious” in their work, that their career prospects were still progressing and felt that there was support available for new initiatives within the company.
However, the survey also stated that employees at small companies are more prone to feel uncertain about their future. The research highlighted a need for small companies to invest in staff development and suggested that manager were not making the most of the talent they have within their company. Managers would have also been more likely to have budgeted on staff training during the recession.
The survey also revealed that managers were also more likely to feel that redundancies within their company had been handled badly.
There are certainly pros and cons for employees working for either smaller or larger companies. However, it is encouraging to hear that smaller companies outperform larger businesses on staff wellbeing. We can look to the results of the survey to see how further measures can be taken to improve even more on this and in other areas.
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( 2.9 / 172 )New employment laws expected to be implemented throughout 2011 will cost businesses an estimated £22.9bn, the British Chambers of Commerce has claimed.
These new measure are set to come into practice this year, despite a pledge from the Government to cut red tape after being warned that job creation was being prevented. The BCC believe the new measures will only add to the burden of red tape.
The new laws are set to be put into place over the next four years, but the BCC has warned that the cost to businesses will be “staggering”.
One of the most expensive law changes for businesses will be down to the plans for agency workers to receive the same amount of pay as permanent staff after 12 weeks of work; the BCC estimates that this will have a recurring cost of £1.5bn a year.
Allowing employees the right to have time off for training is expected to cost businesses £175 million a year and the following year’s pension reforms could have an annual reoccurring annual cost of £1.5bn.
The BCC also believe that the Government’s plans to reform the UK’s employment tribunal system, announced last month, will now be “dwarfed” by the cost of these new regulations.
It is a continuous battle for businesses when they are up against red tape and regulations; let’s hope that the Government will be able to match these new employment laws with more cut backs on red tape.
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( 3.1 / 51 )As the economy continues in its struggle to grow, traders have warned that the expected inflation rise will hinder growth prospects and is undermining the government’s battle in keeping interest rates low.
Economists are anticipating that official data for January will illustrate that inflation has risen to 4%, which would be the highest rate since 2008 and twice the Bank of England’s target level.
The weak pound pushing up the cost of imports, the jump from 17.5% to 20% in VAT and the sharp rise of global commodity prices are reasons for the expected rise of inflation.
If predictions are correct, Mervyn King, governor of the Bank of England, will write a fifth consecutive letter to the Chancellor George Osbourne explaining why. This comes after the Bank of England’s decision to keep interest rates at 0.5%, a percentage unchanged for two years.
The bank will have to explain their policy on Wednesday in an Inflation Report. The Governor has stood up against criticism of keeping interest rates low by insisting “inflation is close to zero and well below target” when excluding imported and one-off cost pressures.
If official data for January does reveal a soar in inflation, it may add further pressure onto the Bank of England to rethink their policy of keeping interest levels at the same rate, which will have an impact on already struggling small businesses.
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