On 6 September, the government launched its National Insurance Contribution holiday. Under the three-year scheme, eligible new businesses will not have to pay the first £5,000 of Class 1 Employer NICs for each of the first 10 employees they take on in the first 12 months of trading, offering a potential saving of up to £50,000.
The scheme is open to new businesses set up on or after 22 June 2010 and will run until 5 September 2013.
Once the £5,000 cap is reached the ‘holiday’ will end for that employee and Class 1 NIC will apply as normal. Any unused relief (eg if the employee leaves) is not transferable. The relief applies only to Class 1 contributions – not to Class 1A or Class 1B.
Relief is not compulsory and businesses will need to apply for the holiday. If you have not applied and been accepted, you will be required to pay as normal.
Business can apply at www.businesslink.gov.uk/nicsholiday
The regions that will benefit include Scotland, Wales, Northern Ireland, the North East, Yorkshire and the Humber, the North West, the East Midlands, the West Midlands and the South West.
However, excluded are businesses in Greater London, the South East Region (Buckinghamshire, East Sussex, Hampshire, the Isle of Wight, Kent, Oxfordshire, Surrey, West Sussex, Bracknell Forest, Brighton and Hove, Medway, Milton Keynes, Portsmouth, Reading, Slough, Southampton, West Berkshire, Windsor and Maidenhead and Wokingham) and Eastern Region (Bedford, Cambridgeshire, Central Bedfordshire, Essex, Hertfordshire, Norfolk, Suffolk, Luton, Peterborough, Southend-on-Sea and Thurrock).
Most staff will be included, but there will be some specific exclusion, for example, employees operating under companies caught by the IR35 rules. Restrictions also apply to subsidiary business, businesses in association and managed service companies.
NOTE: The legislation is not expected to receive Royal Assent until early 2011 and has not been formally accepted. Therefore, if the coalition government falls apart and the NIC Holiday is never implemented, any relief already obtained will be repayable. Other exclusions and restrictions apply.
Justin is a partner at London-based chartered accountants and tax advisers Jeffreys Henry LLP.
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.
Earlier this year, entrepreneur and founder of The School for Startups, Doug Richard, published his Entrepreneurs’ Manifesto – a “declaration of rights” for small businesses.
The manifesto sets out eight demands to a new government, each of which addresses a different key concern for businesses. In the build-up to the 6 May general election, Donut MD Rory MccGwire is offering his thoughts on the issues raised by Doug Richard.
Scrap Business Link?
In his manifesto, Doug Richard calls on the new government to scrap the Business Link business support service to provide savings and to migrate all government business support services online to promote efficiency.
In the report he wrote for the Conservative party earlier, I think he also recommended using the universities and specialist providers such as the British Library as a replacement business support network on the ground. More recently, Mark Prisk, the Conservative Shadow Minister for Business, has been talking about using the existing network of Enterprise Agencies for this role.
I’m sure Doug is as pleased as I am to see that the government is already going flat out to move the whole business of government online. Thousands of disparate systems and websites are being corralled into three mega websites: direct.gov for individuals, and nhs.uk for health.
Yes, this is expensive, but what an improvement.
Lots of individuals lack a computer, but most businesses are online and will readily engage with businesslink.gov, as the evidence already shows. We small and medium-sized enterpriseslike being able to do tax returns and company searches etc online; it is a real convenience. We also use the huge library of advice pages.
So let’s talk about the more contentious idea of scrapping face-to-face business support. But first, a bit of history.
In the 18 years I’ve run BHP, I’ve seen governments come and go. At every general election, there’s a clamour to change the way government delivers business support. And we do change - all too frequently.
In the 1970s, we had Enterprise Agencies, which were hailed as fulfilling an important need.
Then someone said “No let’s have Training and Enterprise Councils”, so we had 82 TECs, with a £1.3bn budget to help SMEs in England and Wales. Scotland decided to have 22 LECs.
Why 82 TECs? Because support had to be local, as everyone seemed to agree that “a business in Preston has a different set of needs to a business in Portsmouth” (nonsense on the whole, but that’s a topic in itself…).
Then someone (I won’t mention Tarzan by name, as I’m trying to stay clear of party politics) said “No, these TECs are failing, let’s have a one-stop shop for business support. We’ll call it Business Link”. So we had had 82 Business Links, as local was still flavour of the month, while Wales invented something else new called Business Eye.
Meanwhile the government had also created a network of nine massive organisations called Regional Development Agencies (in England only), each with a list of tasks and targets that went on for pages and pages.
At this point someone said “Crikey, this costs a fortune and the quality and type of business support varies far too much, so let’s take the 82 Business Links and make them into nine Business Links”.
And that’s where we are today. Endless change. If you ran a business like this, you would have gone bust over and over again. The cost of this never-ending change is too much to even contemplate.
But, finally, we have a brand that, like any commercial brand, has been allowed time to establish itself. Hallelujah. There are even road signs saying Business Link in some towns.
The question now is what we want the brand to offer, and how business support should be delivered. I’ll deal with that in my next blog.
Rory’s other Have your say! blogs
My Count On It® labels enable busy households like mine to keep track of when food has been opened and make an informed decision of whether it should be thrown away. As a busy mother to two young boys, I was always throwing food away because I couldn’t remember when I’d opened it.
Such is the success of my business, a while ago I was invited to an event at Downing Street to celebrate the achievements of Britain’s small and medium-sized businesses – something I never thought would happen. It’s amazing – if somebody had told me two years ago that one of my ideas would be retailing through a national high street store and that I’d be invited to Downing Street because of it, I wouldn’t have believed them.
Getting the business off the ground took a combination of a tried and tested route with a helping of TV quiz show luck. Having come up with the concept I contacted Business Link for help. I then won £15,500 on Channel 4’s Deal or No Deal, which enabled me to move things forward quickly. Following research and trials of product samples, the first batch was manufactured in April 2008 and soon we were trading online (www.count-on-it.co.uk).
Lakeland and Betterware now stock my products and their popularity is growing through word of mouth, online via Twitter (@mummypreneur) and my website. I am also in talks with a distribution partner in America and have sold as far afield as Korea and Australia. Count On It® labels have received glowing endorsements from celebrity mums such as Amanda Holden and Angela Griffin, as well as green/eco advocate Janey Lee Grace.
Becoming a mumpreneur has changed my life and as an advocate for taking an idea to market should the opportunity arise, I’d encourage any mum who wants to fulfill her entrepreneurial dream to take that leap of faith. As Goethe succinctly puts it: “Whatever you do, or dream you can, begin it. Boldness has genius and power and magic in it.”
Lyndsey Young, Count On It
It's every business–owner's nightmare: a furious customer on the end of a phone demanding to know why their purchase hasn't been delivered, why it's broken, or even to complain about a member of your staff. Even if the problem isn't actually your fault, it is crucial to have a proper complaints policy in place.
Recently I made a complaint for the first time and was gratified when I received a full and genuine–sounding letter of apology in return. I was less pleased a couple of weeks later when I received a call from the same company wanting feedback. Although I had been satisfied by the initial apology, being asked by a bored–sounding woman whether I was 'satisfied' or 'very satisfied' with the apology instantly grated. It was clear that the apology was merely part of a process; my answers were probably being tapped into a database as I spoke. For me, this meant that the sentiment of the original letter was lost.
Business Link advises business owners to deal with complaints 'courteously, sympathetically and – above all – swiftly'. Obviously it is important to find out whether your policy works – but is it a good idea to call up the recently–irate customer and take up more of their time only to fill out a brief questionnaire? How useful is a questionnaire anyway? I would suggest that the best feedback is whether the customer returns to you after having made a complaint.
Word–of–mouth recommendation is arguably the best PR for small businesses, but similarly a bad experience can damage your firm's reputation. It is vital to handle a customer's complaint sensitively and promptly, but at the same time ensure that you are motivated by the customer's needs, not just by the desire to prevent bad publicity.
It seems that many people I know have had bad experiences at the hands of larger companies, and this is an area where small businesses can excel. By its nature, a small business is much more likely to offer a personal touch when it comes to dealing with complaints. Rather than having to wait in endless queues, being passed from one customer service manager to another, your customers can connect with you directly to get the answers and, if necessary, the apologies they want.
What do you think? Have you ever had any complaints, and how did you handle them? Did you ask for feedback, and how did you implement it? Are you a customer whose complaints were handled well? If not, how could it have been improved?
Clare Bullock, BHP Information Solutions