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Blair cabinet re-shuffle hit by interest group

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The recent decision of Prime Minister Tony Blair to reshuffle his cabinet has been hit by an interest group, saying that the move has once again ignored the welfare of small businesses.

The Forum of Private Business (FPB) has maintained that the decision has been detrimental for businessmen and business owners who own small businesses. They particularly cite the reshuffling of the Department of Trade and Industry but overlooking the fact that the position for Small Firms Minister has remained vacant.

FPB Chief Executive Nick Goulding said that he thinks what has happened is another case illustrating the negligence of the interests of small businesses. He maintained that since the post was scrapped by Prime Minister Blair, the needs of small enterprises have gone down the pecking order.

The Small Firms Minister’s duties has been shared out to the Minister of State for Industry and Regions Alan Michaels and Parliamentary Under Secretary Barry Gardener and this is not something that small businesses agree with. In the latest round of ministerial reshuffling the positions have been removed.

According to members of the FPB, small businesses should have ministerial representation at the Cabinet level. Based on a survey conducted on FPB members, 81 per cent of respondents voted in favour of having a Small Firms Minister in the Cabinet.

Goulding shared that “Government is increasingly distant from small firms, whilst large business seems to have direct access to decision makers.”

company formation and business solutions professionals are urging the government to also listen to these interest groups in order to determine if their claims can actually help small businesses in the country.

Competent job candidates are getting harder to find

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There seems to be a dearth of good, competent staff for small and medium sized businesses across the UK who are looking for people to fill important positions in these companies. In fact, 172,000 businesses have reported that they have not received any kind of applications for some of the job vacancies. This shortage presents a good opportunity for many recruitment agencies who can possibly help fill these vacancies.

Although a skills shortage among the applying job candidates can still be considered as a tough issue, more often than not the difficulties arise from the fact that smaller businesses do not have a dedicated and trained resource within their organization that can internally address the process of recruitment. This problem is actually being worsened by the fact that if these businesses were actually able to find good staff, retention can pose a significant challenge without an HR team that would be committed to the development of the staff.

There is a growing belief that because small and medium sized businesses are in need of help in recruiting competent staff, recruitment agencies should be doing its best to plug the labour gap and not spend most of its time justifying the fees that it imposes for their services. By using their contacts in the industry, advertising efforts and word of mouth recruitment agencies can have a big chance of getting the skilled candidates that small and medium sized businesses are so desperate to hire.

Make small business tax less taxing says pressure group

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A pressure group is strongly urging the government to finally remove the big headache posed by confusing and time consuming tax returns.

According to the Forum of Private Business (FPB), through its Chief Executive Nick Goulding, “It’s time to make tax returns less taxing. Our research shows that small business is left spending valuable time completing forms that they find confusing and over-complicated.”

Goulding asserts that it is clear that not enough effort is being done in order to give assistance to small businesses in trying to understand what their role and responsibilities are when it comes to filing tax.

Based on the FPB’s league table of taxing forms, the problematic forms were the P35’s, Self Assessment, VAT returns and the expenses and benefits. These are just some of the areas that the group hopes will be simplified in terms of administration.

Goulding issued the sentiments of the group just as the House of Lords Economic Affairs Sub-Committee started examining the effects for tax administration following the Budget.

Goulding further said that “the impact on our members is twofold, they are already over taxed but they also have to deal with the implications should the complicated nature of their tax administration lead to mistakes.”

The group maintains that the government has been slow in acting on the issue and that it is not doing enough to help small businesses fully understand what they need to do when it comes to filing their taxes.

Some company formation and business solutions professionals are also calling for the simplification of the system as it could spur more businesses to file their taxes earlier and also compel those that are intimidated by the process to actually file their taxes.

Business confidence rises for second half of 2006

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According to the accountants and business advisers at BDO Stoy Hayward, UK economic growth is expected to grow stronger in the second half of 2006.

The report, which was included in the most recent BDO Business Trends report, shows that a there is an increase in business confidence both in the short-term and the long-term. There is an expected growth of 3.4 per cent for the third quarter of 2006. This is compared to the 2.4 per cent posted in the last quarter of 2005.

These positive numbers are likely to give tremendous benefit to the
UK economy especially later this year. Some of the other factors that have contributed to this upswing are the rebound in consumer spending, economic recovery in Europe and the fast rising value in the stock market.

The new report also showed that the expectations about UK inflation levels are actually falling. Inflation is being pegged to be at 2.2 per cent by the third quarter of 2006. Because of the expected strong showing of the economy and with inflation foreseen to go beyond the two per cent target of the Bank of England, it is most likely that interest rates will not be slashed this year – much to the disappointment of people who are clamoring for an interest rate cut.

Company formation and business solutions professionals are welcoming this developing trend, saying that the positive economic numbers will surely spur growth and might even entice people to start their own investments and businesses as a way of taking advantage of the conducive environment for business.

Scotland to cut business tax rates

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Finance Minister Tom McCabe has confirmed that Scottish Parliament is planning to cut business tax rates to the same level as England’s by 2007. This move is intended to bolster growth in the Scottish economy, which has been lagging in the recent years.

Businesses in Scotland lack the competitive edge relative to their counterparts elsewhere in the country, given the higher tax rates, and hence higher overhead costs. The tax cuts are expected to help businesses gain a cost advantage, leading to higher productivity and output.

The new policy will be effected in a staggered fashion, with the gap in tax rates between Scotland and England being halved by 2006, and eventually closed by 2007. The move is not without costs, though. To support the policy, Government expects to shell out £100 million for 2006, £180 million for 2007, and eventually £200 million annually henceforth to compensate for the revenue loss.

Company formation and business solutions experts welcome this move to boost the Scottish economy’s growth by introducing measures to help businesses thrive.