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Budget 2011: good for business

Added: 2011-03-23 16:59:05.0

George Osborne has unveiled the new Budget today, with "fuelling growth" being the top priority. As expected, this means good news for small businesses.

The highlights of the Budget for business owners are as follows:

  • Corporation tax will be cut by 2% in April (it was previously going to have been cut by 1%).
  • Corporation tax will fall by 1% each year for the next three years, where it will reach 23%.
  • The bank levy will also be adjusted so that the banks don’t pick up the cost of the reductions in corporation tax.
  • 43 tax reliefs will be scrapped to simplify the tax code.
  • There will be no new regulation on businesses with fewer than 10 members of staff.
  • The business rate relief holiday will be extended for another year for small businesses.
  • There will be 21 ‘Enterprise zones’ created in England which will be supported by tax incentives.
  • Science facilities will receive £100million in funding.
  • Charities will see a reform of administration associated with gift aid.

The above will be very pleasing to business owners, particularly the reduction in corporation tax. Coupled with the plans to alter planned legislation in favour of businesses, it’s been a good week of news for employers who were able to make it through the recession-hit years of 2009 and 2010.

After a couple of years of unfavourable Budgets for owners of small businesses, it can be said that the Budget of 2011 looks rather better for employers. What is your take on it? Let us know by commenting below.


The content of this blog is not legal advice and should not be relied on as such, or used instead of seeking legal advice.


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Government makes employment regulations easier for smaller firms

Added: 2011-03-21 15:17:47.0

The government has announced on Friday that they will make swift changes to business legislation that are designed to make life easier for smaller businesses.

These changes will be:


  • A three year moratorium on new business regulations for new businesses of fewer than ten employees;
  • A move to remove the right for employees to request time off for training in companies of fewer than 250 staff; and
  • The scrapping of the right to request flexible working for parents who have children under 17 (which had been due to brought in this April).

The plans will please many owners of small businesses and also those who may have been considering starting a new business. The fact that they will be given three years off as it were from completing some of the currently necessary paperwork will no doubt please many. Likewise, many employers may have been fearing the laws on flexible working rights changing; something that they will not have to worry about after the announcement.

The plans were revealed to the Federation of Small Businesses (FSB) by business minister Mark Prisk and seem to have divided opinion between employers and employees. Trade union Unite has already claimed that the changes are “anti-women”. Assistant general secretary of Unite Gail Cartmail commented that the announcement is “the latest example of a policy that will make it harder for women to hold down jobs and make a valuable contribution to the economy and the financial well-being of their families.”

Another union, the construction union UCATT said that scrapping the right to request time off for training is endangering peoples’ lives. They commented: "The decision is particularly alarming for the construction industry, due to the fact that as the industry begins to recover from the recession an increasing number of new inexperienced workers will be recruited. Without proper training they could place themselves or their colleagues at risk.”

After a rough couple of years for small businesses in the UK, many business owners may feel that it’s about time that the legislation went their way and made things easier for them to run their organisations.

As ever, Cleardocs will keep you posted on any developments, in particular what this means to the changes that were due to be coming in at the start of next month.

The content of this blog is not legal advice and should not be relied on as such, or used instead of seeking legal advice.

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Cameron champions enterprise as the "only strategy" for UK growth

Added: 2011-03-07 17:22:44.0

The Prime Minister has rallied for the government to get behind entrepreneurs in his speech at the party’s spring conference. Cameron both declared war on the “enemies of enterprise” and stated that the Budget on 23rd March would be the “most pro-growth this country has seen for a generation”.

There is little doubt that the past 2 years have been difficult for small businesses; with the collapse of the global economy and the fact that high street banks have not been lending. However, in the new Budget, the PM and Chancellor George Osborne will seek to make it easier for small businesses in terms of more financial support, the creation of 10 new ‘enterprise zones’ in some of the more deprived areas of the UK and, most importantly for some, the reduction of the bureaucracy associated with running a business.

In a speech which was undoubtedly designed to inspire and ignite the spirit of the underdog, Cameron was clear in his quest to play on the grievances of the small business owner. The following quotes are a selection from the speech:

"There's only one strategy for growth we can have now and that is rolling up our sleeves and doing everything possible to make it easier for businesses to grow, to invest, to take people on.”

"The spark of initiative. The courage to make your dream happen. The hard work to see it through.”

“What drives us is getting things done - and what drives us mad is the bureaucracy, the forms, the nonsense getting in our way”

"Back small firms. Boost enterprise. Be on the side of everyone in this country who wants to create jobs, and wealth and opportunity."

"I can announce today that we are taking on the enemies of enterprise. The bureaucrats in government departments who concoct those ridiculous rules and regulations that make life impossible for small firms. The town hall officials who take forever to make those planning decisions that can be make or break for a business - and the investment and jobs that go with it. The public sector procurement managers who think that the answer to everything is a big contract with a big business and who shut out millions of Britain's small and medium sized companies from a massive potential market."

"We understand that enterprise is not just an economic good, it's a social good."

Whether or not this month’s Budget will have the desired effect is yet to be seen. One sceptic is shadow chancellor Ed Balls who commented: "When we urgently need a plan for jobs and growth to get the economy moving again and help hard-pressed families all David Cameron and George Osborne can offer is empty words but precious little action.

All we've heard from this conference is the reheated rhetoric and warmed up policies of 30 years ago - a VAT rise, deep spending cuts, knee-jerk deregulation and enterprise zones which didn't work when they were tried in the 1980s.

If David Cameron wants to know who is the real enemy of enterprise and growth in Britain today he only needs to look next door at his own chancellor. It is George Osborne's reckless plan to cut too deep and too fast, which has seen the economy go into reverse."

How do you feel about the Prime Minister’s speech? Do you think the Budget will help you and your business? Or do you think that the speech was purely for PR? Let us know by commenting below.

The content of this blog is not legal advice and should not be relied on as such, or used instead of seeking legal advice.

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Latest News; sickness review and the cost of legislation change

Added: 2011-02-24 10:15:39.0 Government commissions review into workplace sickness absence

In a bid to help small business owners, many of whom will be encouraged and expected to create jobs over the next few years, the government has launched a review that will look into how businesses can deal with sickness absence and also the potential opportunities to provide occupational health services.

The review is sponsored by the Department for Work and Pensions (DWP) and the Department for Business, Innovation and Skills (BIS). Although the scope of the review has not been confirmed, many business owners will hope that statutory and occupational sick pay rates and conditions may be examined and that it will not be so easy for employer’s to ‘pull a sickie’.

A similar review took place in 2008 and it was revealed that the annual cost of sickness absence to the UK was £100 billion. Subsequently, ‘sick notes’ were replaced by ‘fit notes’ in April of 2010, a step that has been broadly supported by employers. Business owners will hope that this new review also brings in change that will help them manage this serious issue more easily.

Employment law changes will cost businesses £23 billion over 4 years

The British Chambers of Commerce (BCC) has revealed that employers in the UK will face a bill of £23.87 billion due to the numerous changes in employment law expected over the next 4 years.

The BCC claim that the cost will go on the forthcoming law changes:

  • Pension reforms: £4.5 billion annually
  • Agency Workers Directive: £1.5 billion annually
  • Right to request time off for training: £174 million annually

Director-general of the BCC, David Frost commented: "The Government claims business growth is top of the agenda, yet UK firms will be hit with huge costs once these new regulations come into force.

Unless the Government reduces this kind of red tape, we will continue to have high levels of unemployment and could end up derailing the recovery."

The BCC has urged the Government to use this year’s Budget to stimulate growth by reducing the regulatory burden faced by private sector companies. Frost has also highlighted concerns around the scrapping of the default retirement age, revisions to paternity leave and revising who has the right to request for flexible working. He stated that business owners will be confused by the changes and the administration associated with them and will hence be distracted from growing their businesses.

Whilst there are ways that businesses can stay on top of employment law changes and implementing them into the company’s policies and procedures (by using services such as Cleardocs), it seems that overall costs of these changes to the business are unavoidable. Do you feel that the government is making things harder for you? Or do you think that the changes are positive for your business? Let us know by commenting below.

The content of this blog is not legal advice and should not be relied on as such, or used instead of seeking legal advice.

Comment

Job market showing growth

Added: 2011-02-14 11:48:37.0

Amongst all the stories of cuts, redundancies and layoffs, there’s some good news when it comes to the job market. A report from the Recruitment and Employment Confederation (REC) and KPMG has shown that the number of permanent and temporary appointments in January grew at a faster rate than any time since mid 2010.

The report surveyed 400 recruitment consultancies and concluded that the rise in appointments was attributed to more jobs being made available in the private sector. It also found that average salaries for permanent staff had increased but that, interesting, pay for temporary staff had decreased.

Notably, the demand for Computing and IT staff had shown the most growth.

Whilst the statistics are good news for the job market after a difficult 2010, Bernard Brown, Partner and Head of business services at KPMG warned that “"With looming public sector job cuts, the VAT rise and slowing economic growth, the UK job market is likely to remain volatile over the coming months".

Whilst it seems that we’ve got yet more difficult times ahead, the fact that employer confidence in taking on staff appears to have risen is a positive sign. If the private sector is going to be expected to employ those who will be made redundant from the public sector, any signs of job market recovery now may bode well for the next 10 months.

Do you feel confident as a business owner in taking on more staff? Or do you think that the time is still not right to be employing more people in uncertain economic times? Let us know by commenting below.

The content of this blog is not legal advice and should not be relied on as such, or used instead of seeking legal advice.

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Cameron champions enterprise as the "only strategy" for UK growth

The Prime Minister has rallied for the government to get behind

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Latest News; sickness review and the cost of legislation change

In a bid to help small business owners, many of whom will be

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Job market showing growth

Amongst all the stories of cuts, redundancies and layoffs,

Read More »