The Small Business, Employment & Enterprise Act is soon to roll out across the country, bringing major changes to 11 areas of business.
Here’s what they are – and what they could mean for you.
1. First up is the much-trumpeted pledge to cut red tape. For each new regulation introduced, two old ones will have to be cut, potentially reducing compliance burdens for SMEs.
2. Also aimed at improving regulatory process is the Small Business Appeals Champion, which the government says will make it easer to challenge decisions made by the regulator.
3. Access to finance is typically top of the agenda in business and the new Act will see better sharing of information between banks and alternative finance providers, to help SMEs increase their chances of getting funded.
4. The creation of new “challenger banks” will also improve competition for businesses, says the government.
5. The insolvency system will get an overhaul – hopefully, seeing a reduction in abuse by insolvency practitioners.
6. New incentives are being introduced to get larger firms paying on time and make late payments less damaging to smaller companies (although given that successive governments have struggled to change corporate, or even their own, behaviour on this front, the impact remains to be seen!)
7. SMEs will be helped to grow overseas, with increased access to export finance.
8. Access to procurement processes will be opened up to SMEs. At present, just 10% of government contracts go to smaller firms – something it says it wants to change.
9. New definitions of what constitutes “small” and “micro” businesses will be introduced, in line with EU recommendations.
10. While many of the changes seek to make things easier for small business owners, the changes also see new obligations for SMEs. Whistleblowers that call employers out on breaking rules, such as enforcing banned exclusive zero hours contracts, will have better legal protections.
11. New rules for transparency are also covered in the Act, and SMEs will need to be clear on who owns their shares and controls their business, ostensibly making illegal activity, tax dodging and “corporate shell” systems harder to get away with.