First announced on 4 June 2014, and billed as a way to help make the United Kingdom be seen as a trusted, attractive, and fair country in which to do business, the Small Business, Enterprise and Employment Act (SBEE) finally came into law last month. If you have questions about how this will affect your small business, read on for a brief summary of the key changes.
Defined by Business Minister Matthew Hancock as “the first set of laws specifically to help level the playing field for small business,” the act has been designed to open up new opportunities for small and medium-sized business (SME) owners.
Speaking on the Small Business, Enterprise and Employment Act, Business Secretary Vince Cable said:
Small businesses provide jobs for millions of people across the country and are driving the economic recovery. The Small Business Act will create the right environment for small businesses to continue to thrive by giving them greater access to finance to help them innovate and grow, and make it easier for them to export goods and services made in Britain.
Mr Cable continued, highlighting the act’s hard stance on ‘exclusivity clauses’ which prevent zero-hour contract workers from taking on contracts with other employers:
The Bill’s measures also mean there is nowhere to hide for firms who do not play by the rules, whether by abusing zero hours contracts or not paying the minimum wage.
Once again highlighting the Government’s desire to provide real, tangible encouragement to cultivate small business growth across the country, Business Minister Matthew Hancock stated:
The government has backed small businesses like never before to build a Britain where entrepreneurs can break the mould and take on the world. Coming from a small business background myself, I know first-hand how cumbersome bureaucracy can stifle your ambitions to grow.
Key Changes for Small Businesses and Enterprises
The Government have announced that all small and medium-sized businesses will be affected by at least some of the changes coming into effect over the next twelve months, as many encompass certain legal requirements; such as a business’s filing date with Companies House.
The main changes for small businesses and enterprises are as follows:
Improved Access to Finance
The Small Business, Enterprise and Employment Act provides small businesses with much improved access to finance by increasing the sources through which financing will become available, in order to allow small businesses to grow and create jobs well into the future.
This includes the following:
- Giving banks the power to pass on a business’s details to alternative lenders (with the business’s permission) should they be denied a loan.
- Providing open access to small business credit data, making it easier for small business owners to contact alternative lenders in the first place.
- Increase the speed in which cheques clear using ‘cheque imaging’ to allow small businesses to receive payments sooner.
Increasing Transparency and Reducing Red Tape
Seen as a way to provide small businesses with the key information they need in order to negotiate fairer deals — information which has traditionally been reserved for larger companies willing to pay for it — the SBEE act introduced a new reporting requirement for large companies to help balance the playing field for small businesses.
The act also focuses on reducing red tape for small businesses, allowing them to spend less time worrying about unnecessary, outdated regulations and more time serving their customers. This coincides with the appointment of an independent Small Business Appeals Champion to listen to and campaign on behalf of the needs of small businesses.
Providing Assistance for Overseas Expansion and Public Procurement
In order to make the UK an attractive and fair country in which to do business, the Government want to ease the pathway for small businesses by increasing the support from UK Export Finance to any small business looking to start exporting overseas and expanding into international markets.
In a similar vein, the SBEE act also looks to remove the barriers to public procurement for small businesses, making it easier for small business owners to have a greater chance of landing public sector contracts, as well as to make their thoughts on current procurement practices known.
Ending Abuse of Zero Hours Contracts
Needless to say, if you’ve been abusing zero hours contracts by preventing contractors from taking on contracts with other employers while they have a contract in place with you, you must stop doing so immediately.
The SBEE act also states that employers who pay workers under the National Minimum Wage (for their age bracket) will now face increased maximum penalties that can be amended on a case-by-case basis, depending on the number of workers being underpaid.
Strengthened Rules for Corporate Directors
From October 2015 the SBEE act will introduce a prohibition on appointing corporate directors that will require companies with a director already in place to successfully explain why their director should be exempt, or have this individual step down from their role.
In a bid to ensure that incorrectly appointed company directors are removed from their register, Companies House will make an effort to write to all newly-appointed directors to inform them that their details have been filed on the public register. In addition, the time in which it takes Companies House to strike companies from the register will be reduced.
The SBEE act will also introduce a new process to help protect businesses and individuals that are having their address used as the registered office of a company without their authorisation.
The People with Significant Control (PSC) Register
In April 2016 companies will need to file a People with significant control (PSC) register at Companies House, therefore the Government recommend you and your accountant start preparing this information as early as January 2016.
During this month companies will also be required to notify Companies House of any changes to their company information that needs to take place, after which point you’ll be required to make them aware of any new changes on an annual basis. You’ll also be given the option to keep certain pieces of information on the public register only; making it unavailable on statutory registers.
Next April Companies House will also be updating the ’disqualified directors regime’ with regard to directors misconduct at home and abroad, in a bid to strengthen the database.
Experienced Accounting Professionals
With an estimated five million businesses operating across the United Kingdom, it’s hoped that the Small Business, Enterprise and Employment (SBEE) Act will help provide greater opportunity for small businesses to compete with larger companies, improve their speed of innovation, and ultimately grow.
To speak with an accountant to discuss how the Small Business, Enterprise and Employment Act will affect your business, contact us today on 020 7129 1199 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.