Examples of areas open for comment include:

• Internal workings of companies and partnerships: Rules on shares and share capital, requirement to hold information at business premises and rules on meetings and resolutions.
• Accounts and returns: The content, form and auditing requirements of financial accounts and other reports.
• Business names: The rules covering company names.
• Disclosure of company information: The regulations covering the information companies must supply to the official register.

In a recent blog on LinkedIn a contact said of the growth in start ups, "More people are becoming self-employed and SMEs are being lauded as being the ones to drag UK PLC back into prosperity. Or is it a cynical ploy to reduce unemployment figures by having us creating our own temporary jobs?"

What are your thoughts? It's true that the government is putting a great deal of emphasis on the private sector to help the struggling economy and that more and more people are becoming self-employed. However, what are the reasons behind this increase in self-employment? Is it more opportunities to get into business, the lack of jobs, the public sector cutbacks, working to later ages, increase in university fees putting off potential students, greater encouragement of the entrepreneurial spirit?

Another important question is how successful these new entrepreneurs actually are, as if their new venture fail the unemployment figures, and the economy as a whole, definitely won't show any signs of improvement. So, how much support do new start ups actually get? How easy is it to access finance?

In a recent blog we discussed how age is no barrier to starting a business with entrepreneurs in their teens up to the nineties starting businesses. The government has obviously been listening, well in part, as the prime minister, David Cameron, is believed to be looking at funding young people looking to set up in business using a student loan style scheme. The idea was first proposed by Sir Richard Branson as part of the Virgin Media Pioneers Control Shift campaign.

Do you feel that all 'small' businesses get lumped into the category of SME and the terms small business and SME are thrown around by the media and government without a clear indication of their actual meaning. In fact, while the government talks about helping the UK's SMEs, it is in fact micro-enterprises (under 10 employees) that make up 95% of the UK's enterprises and a third of all UK employment. As almost all start ups are micro businesses any government assistance to new businesses clearly needs to be directed to these micro enterprises.

With SMEs accounting for 99.9% of enterprises it becomes clear that this term is fairly useless to reflect a certain type of enterprise, and when the government talks about helping SMEs it is by no means clear whether micro enterprises will benefit and in a great many cases they probably do not. Because of the power and influence of large corporations compared to micro businesses it's no surprise that achieving equality in regulations is so difficult.

As part of the government's review into how it delivers business improvement and support services a number of changes were announced earlier in the year. Although the Business Link website, the government's online resource for business, will remain and continue to provide businesses with access to information, support and government services, included in the changes was the closure of the regional Business Link advisory service in November 2011.

Much of the information on regionally branded Business Link websites has been moved to the national Business Link website, and improvements to this site have been implemented or planned. These include the Contracts Finder, which is available now, and an improved experience for those starting up in business.

The president of the European Commission, Jose Manuel Barroso, believes that the euro remains strong and that Europe will not go back into recession, something that is good news for UK businesses. However, his comments follow rating agency Standard & Poor's view that the chances of a eurozone double dip recession have grown, despite all the work being done to tackle debt problems in many countries.

Mr Barroso said, "The latest forecast by the European Commission shows there will be growth, modest growth it is true. We are doing all it takes, from tackling the underlying budget problems, to strengthening the governance of the eurozone, from tighter financial regulation to improving our overall preparedness."

George Freeman, MP and entrepreneur, has set out his seven point plan for growth in Britain, which focusses on entrepreneuralism and trading our way back to a successful economy. Here are the seven points, but we want to know if you agree with George Freeman's view and whether his suggestions can help Britain grow. Are they likely to be implemented?

 

1. Elect business-savvy MPs - George Freeman believes we need a private sector led recovery for which we need to have MPs who have experience of how real world business works.

2. The state needs to stand back - The government needs to interfer less and concentrate on the role of government.

3. Cut taxes - reducing taxes actually leads to increased revenue for everyone.

It has apparently proved successful during the trial run in Merseyside this year, but will the Government’s New Enterprise Allowance (NEA) prove itself as effective nationwide? The scheme works with the long-term unemployed (receiving Jobseekers Allowance for at least 26 weeks) to provide them with the opportunity to start their own small business by offering access to a business mentor who will work with entrereneurs to put together business plans. They will also receive a £65 per week stipend for the first thirteen weeks (reducing to £33 per week for the subsequent thirteen weeks) and in addition the entrepreneurs will have access to a £1,000 business loan.

If your answer is yes then you are not alone as a recent British Chamber of Commerce survey highlighted the various concerns raised by sole traders when it comes to employing staff. Issues raised that have been putting sole traders off hiring included dismissal processes, sickness absences, equality legislation, statutory payments and flexible working. Some were worried about National Insurance Contributions, while unaware of the National Insurance 'holiday' for startups, highlighting the need by businesses to fully investigate the assistance that is on offer from the government. For example, did you know about the exemption to micro businesses to new domestic legislation for three years from April of this year?

 

Clearly the issues revolve not just around the actual hiring, but also the long-term costs and management of the staff and not surprisingly many sole traders have been turning to freelancers to fill the gap. It seems yet again the burden of red tape is preventing many small businesses from taking the next step to growing their businesses. Will the Red Tape Challenge bring any benefit to this area of legislation we wonder?

 

Image courtesy: Michal Marcol / FreeDigitalPhotos.net

Small businesses are being targeted again with the news that HMRC is contacting over 40,000 sole traders and one man companies who they believe should be paying VAT, which is presently set at a threshold of £73,000.

 

Businesses need to ensure they are fully aware of the financial situation of their company or risk facing fines up to 100%. At present businesses that aren’t VAT registered, but should be, are being offered a partial amnesty with reduced penalties on the outstanding VAT until 30^th September, 2011. However, the HMRC has reserved the right to hand out fines up to 100% where it believes a business knew it should have been registered but didn’t come forward. How the HMRC will decide whether they believe a business knew they should have been VAT registered is not clear.

Monday saw the launch of a national mentoring scheme with an aim towards educating small business owners on the requirements for getting bank finance. Backed by the British Bankers’ Association, The Prince’s Trust and others it is the latest in a series of plans to try and create meaningful change within the area of access to finance.

 

Somewhere in the region of 200 current and former bank managers will initially be made a ready resource for small businesses. The hope is to guide company owners through the processes involved in applying for a loan. It is the government's hope that these bank-sponsored, trained mentors will form the core of a much larger network of support. This is in response to the closure of its Business Link advice centres which are set to conclude this autumn.

While regulation is a good thing when it comes to protecting all areas of our lives - including businesses, employers and employees - the 21,000 plus rules that currently govern out lives are actually becoming a burden that is hurting businesses and as a result damaging the economy.

The current government has, therefore, set out to cut some of the red tape we are confronted by on a daily basis, and so members of the public, businesses and community organisations are being invited to have their say on regulations. This is where the Red Tape Challenge website comes in.

It's a very simple, but effective concept. Every few weeks a new set of regulations, affecting one specific sector or industry, will open on the website for anyone to comment on. Then, when a theme has closed, Ministers will have three months to explain why a regulation is still required, or it will be scrapped.

Tags: challenge, enforcement, environment, health & safety, rules, regulations, red tape, Red Tape Challenge, economy, business, government, policy, business link, customers, legislation

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