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Shout99; Qdos Consulting, who specialise in tax issues for small businesses; and Novacaster, who provides the interactive websites for Shout99 and the All Party Parliamentary Group were among those invited to attend and contribute to the manifesto now and in the future.
The conference was opened by HRH Prince Michael of Kent, who said that many people underestimate the significance of small businesses and issued a challenge to all those present to help to create a SME manifesto for change by putting an end to obstacles and poor regulations which include inequitable levels of tax, compliance costs, Red Tape and access to finance.
Prince Michael of Kent said: "The challenge is to make the UK the best place to start a business and to raise the profile of SMEs as a driving force behind the economy. The contribution of SMEs is more significant that larger companies and is not recognised. I hope that the manifesto's recommendations make an impact at the highest level."
Government contribution - SBS
The proceedings opened with a presentation from Martin Wyn Griffiths, the Chief Executive of the Small Business Service, an agency in the DTI.
Mr Wyn Griffiths' brief was to outline the Government's plan for small business. However, with the aid of incomprehensible flow charts and heavy emphasis placed on the internal structure of the SBS and the 'satisfaction rate' of customers using it (figures which were hotly contested by some of those organisations present), he did not make a case for the Government being in touch with the needs of small business.
The thrust of his presentation was that the Government needs to close the productivity gap and to do that, more small companies need to grow and, he believed, that entrepreneurial activity is too low. Their aims were to have more people thinking of starting a business; more people starting 'dynamic' businesses; more people growing businesses and expanding; more enterprise in 'under-developed groups' (eg women) and better regulated policy.
He also promoted the Government's Business Links as the service for small businesses and outlined the plans for the development of their new one-stop-shop website. There will also be a campaign 'Enterprise Insight' which will build into an intensive media campaign launched by Chancellor Gordon Brown in June and an 'Enterprise Week' in November.
The chattering in the corridors over the coffee break and during lunch was that his presentation fell short of what the small business community wanted and needed from the Government and raised concerns about the void between the Government's intentions and the reality of running a small business.
Red Tape and compliance costs
However, the conference felt back in touch with reality when the next speaker came forward. Professor Francis Chittenden of Manchester Business School gave a critical presentation of the burdensome compliance costs, Red Tape and ineffective Regulatory Impact Assessments which impacted adversely on small businesses on the Government over-regulates and fails to adequately review and check the accuracy of their RIAs and their cost:benefit ratios.
His overall conclusion was that there was plenty of scope for improvement and the impact of regulations on small businesses should always be considered as the compliance costs were disproportionately higher than for larger organisations.
On Regulatory Impact Assessments he suggestions included the following short term improvements:
- require evidence that the costs are justified by the benefits;
- act on the Better Regulation Task Force guidance of looking at alternatives to regulations. He said: They do good work but it gets ignored
- Cost alternatives to regulations "very rare"
- Cost the impact on small firms
- Consult SME representative bodies
- If those people consulted estimate higher costs, it should be reviewed within two years
- Have sunset clauses where possible; always review
Shout99 recently revisited the Regulatory Impact Assessment which was carried out before the introduction of IR35 and found, four years on, little information exists to ascertain the accuracy of the forecasts. (See: What the Government predicted for IR35.)
Taxation of owner managed business
Steven Alambritis of the Federation of Small Businesses was invited to make the case for owner managed businesses by outlining two negatives, two positives and concluding with a call for 'fairness'.
His first negative was the 'messing around' with changing the corporation tax rate (IR591). He said that the FSB had welcomed the introduction of the zero tax rate in 2002 and had called for it to be extended to the self-employed. He felt that the rush to incorporate, and what was since perceived as a drain on the Treasury, should have been anticipated.
His second negative was the 'white van tax' which he claimed homed in on the small business.
He did, however, welcome the fact that the Working Tax Credit is no longer paid through the payroll; and he welcomed the streamlining of the merger of Customs & Excise and the Inland Revenue.
He concluded with a plea for a level playing field. He said: "When businesses overpay taxes, the interest rate paid back is miniscule and much less than when the Inland Revenue owe the business. It should be same rate whether owed or owing".
Manifesto
The session concluded with a question and answer and the commitment from all parties to contribute to the formulation of an SME Manifesto.
After the event, Ron Gould, managing director of Qdos Consulting said: "This initiative is a good starting point to recognise the important contribution small businesses make to the economy. It has identified many problems which SMEs face in dealing with the increasing complexity of operating a business in the UK. We look forward to helping to develop the firs manifesto for SMEs."
Simon Banton from Novacaster, which hosts the interactive Shout99 and APPSBG websites said: "This has laid the basis for development. The All Party Parliamentary Small Business Group has the ability to consult online with small businesses about what they want. We hope they will take on board the comments they receive from small businesses who have first hand experience of operating in the UK"
Your contribution
As a member of Shout99's network of freelancers and small businesses you are invited to participate in the formulation of the manifesto for SMEs. If you wish to contribute, please post comments below which will be summarised and passed on to the All Party Group for their consideration.
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Susie Hughes © Shout99.com
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