David Cameron wants to hear from you
We are excited to announce that we are working with the Prime Minister’s Office to cut red tape for people looking to start a business. The Prime Minister wants to hear your ideas on how to make UK legislation more business-friendly, and your experiences of setting up a new business model. David Cameron has acknowledged that some regulations may be outdated, and his Office will follow this thread to find out how you – our readers – think the government could update legislation to reflect the challenges facing start-ups today. Any specific regulations that you flag up will immediately be ‘put on probation’ – and will be scrapped unless the relevant department can justify or modify them. In particular, the government wants to hear: – What was your experience of setting up a new business model? – What specific problems did you run into? – What were the rules and regulations that got in your way? – What part of the system held you back? After 10 weeks of collating your ideas, the government will then work with contributors to translate good ideas into action. This is your chance to tell the government what’s holding you back, and to help change the UK’s business landscape for the better, so please take this opportunity to have your say by sharing your experiences below. Many thanks, Steph Welstead Editor of Startups PS If you want to share your thoughts privately, you can email email@example.com
Firstly, I’d like to say that this is a wonderful idea! Many small businesses feel that they have no choice but to fight their way through all of the challenges they face alone, so I welcome this opportunity to provide some feedback.
While we haven’t faced any real red tape hurdles as such, we have faced many barriers in trying to enter the retail marketplace without a massive bankroll.
There are very few opportunities to create a retail space for a tiny startup, especially in the high footfall city center areas. Many of us do not have the £50K+ rent, plus rates, plus shop fitting costs, etc to get out there and put our products under the noses of the general public. We need low rent, rate free, shared spaces, like community indoor markets, where we can start to build our brands. While some of us struggle to find space in markets or concessions, massively funded "start-ups" can waltz into prime real estate.
Any government serious about promoting entrepreneurship for regular people, will create enterprise markets, where people can try a business model for a day, week or month, and get real feedback from real customers.
Selkies Artisan Soap Company
I think it would be great to have legislation that applies to companies with 10 or less staff. These could be cut down versions of existing legislation but far easier to administer and understand. So like the employemnet law changes they are talking about were small businesses can hire and fire staff easier. They have done this with the flat rate VAT scheme. That allows very simple VAT paperwork if your turnover is under £180k ish when you sign up and you can stay in the scheme until turnover reaches around £230k I think. They could do the same with small business rules so if you have less than 10 employees when you start up you can stay on the small business legislation until you reach 15 employees. That way as you grow from 10 to 15 staff you can learn the new rules and ensure compliance.
This could make it really easy for small companies to invest in staff to do productive work not just lots of admin staff to do all the required paper work. I’m sure they could come up with simplyfied corporation tax rules a bit like the flat rate VAT scheme and very simple employee and employer rights legislation and spend their time tackling companies that abuse the rules rather than tackling companies that simply dont have the knowledge or budget to understand all the legislation so they never expand.
Many small businesses stay as one man bands or husband and wife teams simply because they are scared of employing staff, with all the extra paperwork and rules it brings. if there was a simple way to expand they could get used to managing staff and then get used to the administration when they reach 15 staff.
I have been in IT for 36 years and I have run small IT companies for the last 29 years.
My customers are UK PLCs in the banking, credit card, insurance and software sectors. Over the years off-shoring has not really affected my business as much of the work that is sent off-shore ends up coming back into the UK due to quality issues / for testing / for implementation.
Since circa 1992 UK PLCs have opted to bring in staff using Intra Company Transfers, commonly referred to as On-Shoring. On-shoring, in addition to Off-Shoring has 4 effects, within the PLC:
It eliminates the need for the PLC to provide technical training and hence a technical training department
It eliminates the need for the PLC to offer graduate and other trainee positions
It eliminates the need for the PLC to offer re-training for internal staff
Local in-house IT knowledge starts to disappear
On-Shoring also affects my business:
The non-EU worker that comes in via an Intra Company Transfer is employed on a lower salary when compared to UK IT professionals (£20K+ vs £40/50K+)
The non-EU worker that comes in via an Intra Company Transfer is entitled to a 52 week NI holiday – I am not
The PLC understands that if the non-EU worker is here longer than 12 months that the minimum salary required will need to increase. To combat this the PLC ‘swaps’ non-EU workers in and out to make best use of the low salary and the 52 week NI holiday!
I am eager to run an apprenticeship scheme, given my 36 years of experience in IT. First though, I need to grow my business, such that it can support more than just me. To do this I need a level playing field !
The UK does not have an IT skills shortage yet!
An insurance company employed UK permanent and EU Freelance Consultancy staff working in IT. Over six months they gave each person a shadow. These shadows were from an non-EU Off-Shore company. At the end of that six months ALL staff and Freelance Consultants had their contracts terminated. That IT knowledge is now lost to the UK and many of those staff are now unemployed with IT skills!
My business needs:
Use of Intra Company Transfers should be restricted – more than now – especially in IT
Encourage UK PLCs to start offering training like they did in the 1970′s and 1980′s – lets get the next generation trained up by the PLCs
Real world minimum salary for Intra Company Transferees – in IT £40k-£50k in that first year!
Remove the 52 week NI holiday for Intra Company Transferees
Remove the spectre of IR35 from hanging over me – I am in business!
Can you help ?
How about changing the recent EU herbal medicine laws so we can advertise and freely sell alternative health remedies – lower medical costs, self administered, minimal side effects by definition? It’ll slash NHS costs by 50%+ easily if this is encouraged, the new laws are regressive and backwards. Paracatemol, ibuprofen etc is freely available even though news reports admit that exceeding even the dosage slightly can cause hospitalisation or even kill. Big pharma is dead, let alt. health practioners spring from their ashes
UK is known for its innovation, but we get no support or help regarding Design protection and UK copywrite protection and legislation is a joke
If we are to recover the UK needs to find an easy route to Protect its IP and innovation. The we have the tools to export or licence IP
Big companies can spend £10,000′s on IP protection – SME’s and the innovative ones cannot
The Government needs to help make Britain a place to innovate and not get ripped off by the rest of the world.
David Cameron also needs to acknowledge that pockets of innovation and technology startups are across the UK not shoreditch roundabout – grants and support needs to be evenly distributed and SME’s should not discriminated because they are not in London or the black country !!!
I wonder what this exercise will accomplish. Because Britain has no written constitution, laws accumulate. Regulation is increasing inexorably e.g. local council’s powers. So is taxation. So is surveillance.
Set tax at 10% across the board, for everything, and make it a law that if you want to put a law on the statute books, you have to take another one away. Something simple, clear and defining. Cut the Gordian knot!
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Colleagues in Germany have access to a contact bureau to provide personalised, human advice to startups on all the help govt. can provide, including access to all grants/funding from the state/EU. It is very effective and the local government gets good feedback on the impact of these startups on the local economy. They also give general advice and support on stuff like skills training, VAT requirements/company registration process/employee and intern hiring etc. Something like that would be great to have here.
As an independent retailer I have always made every effort to not only comply with the Sales of Goods and Services Acts but to actively help customers understand their rights – this is the way it should be and I wholeheartedly support the objectives of the legislation. This is in stark contrast to most retailers and manufacturers, particularly the large, dominant, organisations.
Placing the responsibility on the retailer instead of the manufacturer along with the weak enforcement places both the consumer and the small retailer at a huge disadvantage:
• The manufacturer is free to make substandard products and the independent retailer either takes the liability on (which, with a £2,000, computer can easily end or seriously cripple the business) or loses vital sales (and consumer confidence) by not stocking poor quality major brands that larger competitors can.
• Manufacturers and distributors will accept faulty merchandise (rejected under the sale of goods acts) returns from large retailers, owing to their buying power, but refuse to do so from the smaller retailer, this is often explicitly a part of the supply contract. Any attempt to force a return assures that the distributor account will be closed and the retailers business crippled or ended, again this is often an explicit clause in the contract.
• When the consumer is sold faulty goods, there is no enforcement of their rights so retailers often deny liability because:
o smaller ones cannot absorb the costs;
o larger retailers and manufacturers (when bought direct) can intimidate customers and afford the legal costs.
The consumer is usually misinformed so accepts the fault or, if aware of their rights, has the stress, inconvenience, and perceived risk of taking legal action which, for most, is far too daunting – the Consumers’ Association (Which?) have often demonstrated this subverting of consumer legislation.
I ask that the Acts be revisited to:
• Shift the responsibility to the manufacturer; with the distributor, and retailer obliged to facilitate and uphold the consumer’s rights. As the legislation stands, the large retailers, and manufacturers have an unchallenged and unfair advantage that minimizes competition from independent retailers who could, otherwise, drive improved quality, service, and local job creation.
• This producer responsibility needs to be robustly enforced by a regulatory body – trading standards perhaps – on the understanding that all are treated equally, with no preference or leniency for the larger and dominant organizations (unlike alcohol retailing, where independents are fined heavily while regularly offending national chains are given warnings because they ‘demonstrate’ compliance). The onus should not be on the consumer to search for their rights and then have to take legal action themselves.
The thing I have found most difficult is taxation issues and worrying that I am not filing things at the right time or in the right way. As a start-up business bringing in a very small amount at the moment in a very unstable marketplace it is daunting and worrying that I may get hit with a large bill from my accountant or by having to pay a book keeper that could wipe out a month or twos profit. The way things are phrased when you speak to people at Companies House or HMRC is often not very user friendly when you haven’t experienced doing accounts or filing returns before and have previously been employed.
The other problem which must apply to lots of people starting up small businesses is that you may be doing part time or temporary employed jobs to make ends meet whilst building client bases up or have other incomes such as payment from lodgers. This makes the whole process even more confusing working out what you are and aren’t likely to be taxed on and ensuring that you have enough money left over to pay any tax costs that will be demanded of you.
Some sort of free or subsidised accountancy advice or book keeping to help to get you into the swing of things would be very helpful.