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I wish that every meeting could be as interesting as the one that I just had.

It was a group of founders, but not just any old founders. These were the founders of UK business advice websites primarily aimed at small businesses. Between us, we have a regular user base of over half a million businesses each month. By any standard, that is an extremely large audience.

Doug Richard (of School4StartUps), as always, had a lot to say. Fair enough, as it was his Enterprise Manifesto that we had all gathered to discuss.

We started with his number one question: Should Business Link be scrapped? I must declare an interest at this point. Various bits of Business Link, and the website businesslink.gov in particular, are clients of my company. But I not only depend on Business Link for part of my annual revenues, I also see first hand some of the good, effective support that is given by Business Link and its partners to small businesses.

Doug would scrap the regional (“offline”) part of Business Link tomorrow. As someone who has been involved in turnarounds before, he reckons that the set-up in the regions is too institutionalised to be capable of being turned around into a new approach. “Best to start from scratch. Scrap it, then wait a couple of years and see how things look.” Obviously, this is throwing the baby out with the bathwater, but Doug is not a man for half measures.

Shaa Wasmund (smarta.com) was more soothing and pragmatic than I had been expecting from reading her ultra-dynamic biography. While she commented that Business Link is too dominated by cadres of civil servants and the government way of doing things, she also mentioned how impressed she was with some of the initiatives being delivered by a Business Link that she works with.

Emma Jones also had some positive feedback, saying that the homeworkers who chat to each other on her Enterprise Nation website recommend the Business Link seminars to each other. Then she asked the question that was on everyone’s lips. If one did scrap Business Link, what would you replace it with?

At this point someone mentioned the figure of 35% as the projected shrinkage in the public sector over the next several years. Many of these people, notably the over 45s, will not find employment thereafter. “What will we do?” I asked the room, “Abandon them? Or help these business novices into some kind of self-employment, if that is the only option for them other than welfare?”

Nick James (freshbusinessthinking.com) is a big believer in online. So much so that, like Doug, he reckons that Business Link should only offer online help. “If people do not want to take advantage of it, that’s up to them. Nowadays every business should be online if they are serious about what they do.”

The trouble is, the website businesslink.gov reaches less than 45% of businesses (it says in its latest annual report … which, being a bit of a swot, I had read that morning). And the excluded 55% are exactly the people who need the most help to start up and grow a small business.

Dan Martin (Business Zone editor) backed me up on this point, saying that we must not assume that everyone else is like us. We regard online information as the obvious solution, but lots of other people don’t.

We all agreed that Business Link has become very good at delivering the metrics demanded of it by government. But, as Nick neatly put it, “to score a metric point for having a phone conversation or for having sent out a brochure is to miss the point of what business support is there to do.”

We all felt that the Business Link access brand itself is valuable. Even slash-and-burn-Doug agreed that it would be wasteful to throw this away only to then have to reinvent another access brand to replace it. Over the last fifteen years Wales has regularly reinvented both its business support network and its access brand, at great cost and for no obvious benefit.

So, although Doug had started the discussion session as provocatively as ever, likening his Enterprise Manifesto to the successful manifesto approach taken by Karl Marx 150 years earlier, at the end of the day we all found that our positions on business support had a lot in common.

Firstly, we all have a desire to help people to start and run businesses and feel that someone, somewhere, needs to be paid to do this support service. Secondly, we loathe what you might call the public sector obsession with spurious metrics, metrics which start life as a measurement to help achieve a goal and which then quickly themselves become THE goal.

Our discussion ranged over a number of topics in a short space of time. We covered public sector procurement (Yes, have a quota for small businesses, which the big contractors have to fulfil through transparent subcontracting), social enterprises, and the need for a high speed broadband infrastructure.

It was a pity that not everyone could make it. David Lester (Crimson Publishing, which owns startups.co.uk), Stuart Rock (Caspian Publishing, which owns realbusiness.co.uk), Alex Bellinger (smallbizpod.co.uk) and Jasmine Birtles (moneymagpie.co.uk) couldn’t make the meeting but would have enjoyed it I’m sure.

Michael Hayman of the PR firm Seven Hills did a great job of keeping the conversation going and keeping us all laughing at the same time. We were never going to have time to each propose and then debate our own vision of how business support should be run in the UK but we got some good points out on the table.

An interesting meeting, as I said. I don’t think you could find a more committed, can-do group of individuals when it comes to helping other people to start and grow a business. Something tells me that we will be meeting together many more times over the course of 2010 and 2011 to exchange our views on how business support, regulations, taxation and the whole enterprise landscape might be improved in the UK.

  • Business regulation
  • Have your say! Business support – Part 1
  • Have your say! Business support – Part 2
  • Have your say! Business support – Part 3
  • Visit our extensive election coverage page on the Start Up Donut
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    The election messages continue to dance around reality. I did arithmetic at primary school, but did the politicians?

    Here’s my maths. The government spends £400 for every £300 it receives, spending half our national income. If the country earned £800 per annum, the government spends £400, of which £100 is borrowed. Total government debt would be £500, rising by £100 per annum. This is less than six years away from going down the pan like Greece.

    If we protect health, the government would have to cut a third of all spending to balance the books. That is an unimaginable level of cuts implying public sector pay falling by a third, which in turn would depress GDP severely making things even more difficult.

    If GDP grows, it will be better. But we live in an uncertain world, with huge financial risks still lurking all around. Still all of the talk is about additional spending and what will be protected.

    We have a financial crisis worse than anything seen in our lifetimes. Why are the politicians playing dumb and not getting totally real with the electorate. Maybe we still don’t want to hear?

    Chris Barling, Actinic

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    The Liberal Democrats have come under some fire for a negative campaign tactic of claiming that the Conservatives will not commit to saying they will not raise VAT. The reason for the criticism is that the Liberals will themselves not commit to saying they won’t raise VAT either.

    I believe the decision taken to lower VAT to 15 per cent was a good one, but was marketed wrongly. It as presented to the general public as a saving across the board. But, as a member of the public who buys different things in his shopping every week, a saving of a couple of per cent was not noticeable on my Tesco receipt.

    However, as a director of a company with VAT returns running into thousands of pounds, the VAT decrease was genuinely helpful. To my customers, saving £1 on a violin was irrelevant. Our products are priced to sell, so I decided not to pass on the VAT saving but instead to raise all of our prices.

    To the customer, the prices remained exactly the same. But the few thousand pounds I saved by doing this probably saved a job.

    If VAT is raised, I would like to see the Government promote it as a rise on the price of all products, just as last year they promoted it as a reduction on all products. But this is not likely. And, without a strong message that this is a universal price rise, many small companies scared of lifting their prices will try to absorb the extra tax themselves. This will be severely to their detriment.

    Moving across the VAT threshold is one of the most difficult barriers for the emerging small business and a higher rate of VAT will only add to the burden. I would hope that on the day that VAT is raised, so, too, is the turnover threshold at which a business must register for VAT – and by a considerable amount.

    I could write further on many more issues from mortgages for the self-employed to my belief that the Conservative’s recent deluge of signatures from business leaders is a boring stunt with no real message for the struggling small business.

    Clearly, business leaders will sign up against any tax that would befall them, so it’s a shame the Tories didn’t use this platform to announce other more relevant, more helpful, business- centric manifesto pledges… but I said I wasn’t going to write about that, so I must stop.

    Whoever you vote for at this election, I encourage you to actually use them. More than once, my company has written to elected representatives and you know what? Some of them are actually out to help us – it’s not all house swapping and duck houses!

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    Perhaps controversially, I believe that too much emphasis and, indeed, money is spent on encouraging people to start their own business. In my opinion, resources should be restructured to offer more help to people once they have actually taken the plunge. 

    I believe people should be shown that business is a genuine career option, and I am a strong advocate of Young Enterprise. But I’ve seen too much money wasted on national campaigns encouraging Joe Bloggs to start a business while someone who has a great small business cannot get to the next stage because of unnecessary barriers.

    A prime example of a product which should help but which doesn’t is the Government’s Small Firms Loan Guarantee (SFLG). The idea behind this is that the Government covers some of the risk of the loan in order to allow banks to lend more easily to small businesses.

    This was re-launched last year as the Enterprise Finance Guarantee Scheme and the Labour Party’s manifesto tells us it has helped 9,000 businesses. Writing as someone who has first-hand experience of the SFLG, I can tell you that if I was to start the process over again, I certainly wouldn’t bother. In the end we gave over so many of our own guarantees that the entire point was lost; despite whatever their PR says, the banks are simply not ready and willing to lend on this scheme.

    In a nation of more than 60 million, 9,000 people on this scheme is not a claim to fame but an admission of failure. The figure should be tenfold. The Government needs to seriously and quickly address this issue and they should not be putting forward a scheme which the banks may or may not promote. They should be telling the banks that if a business comes in and meets a set of criteria, then they must allow them finance under a scheme where the risk of the loan is partially covered by the Government itself.

  • Business regulation
  • Have your say! Business support – Part 1
  • Have your say! Business support – Part 2
  • Have your say! Business support – Part 3
  • Visit our extensive election coverage page on the Start Up Donut
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    I’m infuriated by the election campaign. When things were booming, the Government poured more petrol on the fire, preventing any correction and encouraging the whole population to binge on debt. Then times turned bad, so they borrowed even more. Spending has to reduce because we’re spending more than we’re earning. We understand that on a personal and business basis so why not on a national one?

    In business we know that delay makes things worse. Every day of piling on more debt steals from the future. Japan blazed the trail we’re following and got 20 years of stagnation with still no end in sight. And the Government is running on a record of being a safe pair of hands! Yeah, right.

    The opposition isn’t getting the point across, because they think we don’t want to hear bad news. They are too scared to say that public sector jobs and benefits will have to be cut.

    Sometimes the future of the country should be put before immediate electoral gain. And sometimes a gutsy and principled stand is rewarded. But we aren’t really engaging with the issue and the political commentators aren’t making much of it either. Maybe I’ll take a holiday in Greece this summer. It will be nice and familiar.

    Chris Barling is chief executive of Actinic

    Do you agree with Chris? What do you think about politicians’ promises and their handling of national debt? Leave your comment below.

  • Have your say! Business support – Part 1
  • Have your say! Business support – Part 2
  • Have your say! Business support – Part 3
  • Visit our extensive election coverage page on the Start Up Donut
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    1. File the returns by 19 May 2010. Late filing can result in a penalty which is £100 per 50 employees for each month or part month that your return is outstanding.
    2. Nearly all returns must now be filed online. Make sure that you are set up to do this well in advance of the due date.
    3. You must have paid any outstanding PAYE and NI by 19 April 2010 (22 April 2010 if you pay electronically).
    4. You have to complete a return for all employees who have been paid at or over the lower earnings limit.
    5. By 31 May 2010 you have to give a form P60 to all employees who your completed a P11 for and who still worked for you on 5 April 2010.
    6. You need to complete a P11D for relevant employees by 6 July 2010. Late filing can result in a penalty which is £100 per 50 employees for each month or part month that your return is outstanding.
    7. Any NI due on expenses and benefits on kind must be paid by 19 July 2010 (22 July 2010 if paying electronically).
    8. If you are set up as an employer you must still file a return. If you have no entries then you will file a nil return.
    9. If you are a sole director/employee company paying yourself a small salary you may still need to file an Employer Return. Your accountant may do this for you but check that it is included in your fee.
    10. If this all sounds too complicated – get an accountant to do it for you!

    Elaine Clark, www.cheapaccounting.co.uk

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    With the general election imminent, it’s hard not to see the most recent budget as strongly political. A number of tax incentives were announced, mainly to benefit the largest groups of taxpayers, but paid for by rises affecting the wealthy.

    There were no further announcements on income tax, National Insurance or VAT. Although, as previously announced, a 50 per cent top rate of income tax will be introduced from 6 April 2010 on incomes of more than £150,000. On the same date, a reduction in personal allowances will start on incomes of more than £100,000. Finally, a 1 per cent increase in National Insurance is due to take effect from 6 April 2011.

    First-time buyers escape stamp duty

    The stamp duty threshold will be raised for first-time buyers from £125,000 to £250,000. As the threshold was raised at midnight last night, almost all affected buyers who have not yet exchanged will benefit. The stamp duty rise will take effect for the next two years, and could result in tax savings of up to £2,500, compared with the previous threshold.

    Wealthier homeowners will fund the rise. There will be a permanent increase in stamp duty from 4 per cent to 5 per cent on house purchases over £1m.

    Tip: Where possible, consider negotiating the asking price to below the threshold by negotiating extras such as curtains or garden furniture in a separate deal.

    Good news for SMEs

    From October, there will be a business rates cut. This will result in an exemption for properties with a rateable value of less then £6,000 and an increase in small business rates relief for properties with a value between £6,001 and £11,999.

    The annual investment allowance will be doubled to £100,000. The relief – which allows a 100 per cent tax deduction for new capital expenditure – will be welcome by small and medium-sized businesses in particular.

    The lifetime limit for entrepreneur’s relief will be doubled, with the effect that the first £2m (previously the first £1m) of gains will be taxed at an effective rate of 10 per cent. Contrary to wide predictions, Capital Gains Tax did not rise with the Budget, but will remain at its historically low level of 18 per cent.

    Tip: It continues to be a good time for businesses to invest in growth. The difference between the top rate on income tax at 50 per cent and Capital Gains Tax rate at 18 per cent provides a clear incentive for investment in business expansion.

    The Chancellor announced a 15 per cent increase in the number of government contracts that will be awarded to SMEs.

    The two state-subsidised banks, RBS and Lloyds, will lend a further £94bn, of which at least half will be to small and medium-sized firms.

    The Chancellor will set up an investment bank with £2 billion of equity to invest in low carbon industries such as wind farms.

    The planned hike in petrol duty by 3 pence will be staggered, so that there will be a 1 pence rise in April, a further 1 pence rise in October and the final 1 pence rise in January 2011.

    Good news for savers

    As announced in the pre-budget report, the ISA limit will be raised from £7,200 to £10,200 from 6 April. The Chancellor also announced in this Budget that the limit will rise in future years in line with inflation.

    Tip: If you have not yet used your ISA allowance there are just a few days before the end of the tax year to use the allowance before it is lost.

    The wealthiest targeted

    The one-off 50 per cent tax on bank bonuses has raised more than £2bn – double the amount forecast. Further attempts to increase tax revenue from higher income groups were also announced.

    The inheritance tax thresholds will be frozen for four years at £325,000. If there is inflation, this will amount to a real term reduction in the threshold.

    There will a crackdown on tax avoidance through agreements made with Dominica, Grenada and Belize.

    Tax credits rise

    Families with one and two-year-olds will receive an additional £4 per week in child tax credit from 2012. The number of hours needed to qualify for working tax credit will be cut for the over 60s.

    Tip: Consider making a protective claim for tax credits. Your tax credits claim is based on the prior year unless there is an increase in your income of more than £25,000. Alternatively, you can claim for your assessment to be made on your current income level. Careful planning can ensure you derive the maximum benefit from the system.

    The tax system is constantly changing and it is important to review your investment plans, cashflow forecasts and wealth management in the light of new rules and regulations.

    Raphael Coman, founder of south London-based Coman & Co, is a chartered certified accountant with many years’ experience gained at leading, national accounting firms. He specialises in taxation and small business accounting and offers personal tax advice to business owners, managers and contractors.

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