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The FPB is urging the political parties to ease the burden on small to medium-sized firms in five fundamental areas.
Making it easier to employ people, with lower additional costs
The FPB believes the hiring, managing and expelling of staff is beset with difficulty and cost for smaller businesses. Regulations change too fast and are weighted against small firms.
Maternity leave: The FPB believes there needs to be a reduction in the cost and uncertainty of maternity leave. Bosses should be given the right to be given firm dates for the employees intended return to work date.
Employment tribunals: There is an urgent need to reduce unfairness and the cost of tribunals. Decisions should be based on whether employers acted reasonably rather than adherence to rules.
National Insurance Contributions/Minimum wage: NIC accounts for a much higher proportion of SME's costs than it does with large firms. The planned one per cent increase should be withdrawn. The Minimum Wage has increased alarmingly fast; future increases should be linked to the retail price index.
Helping them to keep expenditure low and fund growth
Finance is the building block on which businesses are based, but for smaller firms it is difficult to find the funds to grow - because their costs are greater. They pay more, relative to size, in taxes and late payment is increasingly a problem again.
The FPB believes the Government should make it easier to fund growth by: a) Allowing monthly staged payment of corporation tax and schedule D income tax from small businesses b) Reviewing the recent money laundering regulations c) Cutting back on the red tape which makes it difficult to raise equity finance d) Encouraging bank lending, including developing the loan guarantee scheme
Making regulation more appropriate for smaller businesses
Regulations hit SMEs hard. Compliance costs are a higher percentage of turnover than for big businesses. Employers are not regulatory experts and Government agencies do little to support compliance.
The FPB believes the Government should ensure regulation is appropriate by: a) Providing compliance cost compensation to eliminate competitive distortions b) Restructuring and simplifying tax rules, for example, by merging NI and PAYE c) Using 'comply as you complete' documentation, such as the FPB's Health & Safety Guide.
Encouraging the creation and continuance of businesses
Starting a business is still not often not seen as a valid career path. Big business is seen as offering greater rewards and no comparable risk. Company law creates fiscal and regulatory confusion for those setting up and running a business. Government policies are focused on creating new businesses rather than supporting established firms.
The FPB believes the Government should encourage entrepreneurship by, for example: a) Using positive measures to encourage under-represented groups to start new businesses b) Reforming company law, and seeking further clarification of legal identity for small firms c) Increasing the support available for established businesses d) Restoring Capital Gains Tax retirement relief on the sale of long-term business assets.
Creating a fair business environment
Fair competition is the basic condition on which an effective free market depends, but SMEs suffer a disproportionate burden in many cases. The VAT system creates unfair competition. Larger businesses exploit VAT loopholes, which give unfair advantages. Transport links are essential for all business. Small firms should be protected from measures such as the London congestion charge and excessive car parking fines.
The FPB believes the Government should create a fairer environment, by, for example: a) Closing the VAT loopholes big businesses are being allowed to exploit b) Reforming property law to outlaw upward-only rent reviews c) Introducing an effective business rates relief scheme focused on the size of the business d) Developing transport infrastructure to meet the needs of smaller firms.
Backbone of the economy
FPB Chief Executive, Nick Goulding, said the small business community has a range of concerns that the political parties must address.
He said: "The five fundamental steps are there to show the political parties where the small business community needs help most.
"Employers want to see that political parties understand the disproportionate burden on small firms. The FPB is looking for evidence that the party leaders and their business teams are thinking about, and acting to relieve, the pressures on small businesses.
"It should not be forgotten that there are four million small to medium-sized businesses in the UK, providing more than 12 million jobs, employing 58 per cent of private sector workers and contributing 52.4 per cent of the UK's GDP. Smaller businesses are the true backbone of the UK's economy."
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Susie Hughes © Shout99.com 2005
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