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December 2015

18 December 2015

Small Business Saturday sees sales surge for SMEs

Analysis of 1,200 UK SMEs using Brightpearl retail software system in the run-up to Christmas shows that sales on Small Business Saturday were up 16% on the previous year but that Cyber Monday saw the greatest overall sales, even though volume was down 2% on 2014. Black Friday and Cyber Monday weren't "anywhere near as significant as in recent years," said Brightpearl chairman Charles Grimsdale. “And the fact that the value of the average order dropped £16 from 2014 suggests retailers have been heavily discounting."

Are over-stuffed wallets damaging shopper loyalty?

New research by Foolproof has shown that shoppers are getting fed up with carrying so many loyalty cards around. The survey found that 65% of consumers had turned down additional cards with 35% saying they hadn’t any more space in their wallet; 50% said that they would be likely to use loyalty initiatives more if they were available via mobile. Peter Ballard, founding partner of Foolproof, said: "The smartest schemes will be the ones that can predict our shopping behaviours and patterns, and help deliver loyalty incentives 'just-in-time' to be one step ahead of us and enhancing our shopping experience in ways that genuinely serve us and reward us for our loyalty."

British food and drink entrepreneurs thriving

The number of food and drink manufacturers in the UK grew by 6% in 2014, taking the total number to 8,225 firms, according to analysis of Government figures by Santander. The sector exports almost £12.8 billion of food and non-alcohol drink products a year, 75% of which goes to the European Union. Mark Collings, head of international, Santander SME Banking, said: "The UK food and drink manufacturing sector has become a major UK success story on an international scale. Over the years the Made in Britain brand has become synonymous with good quality products and services."

Employees call for more appraisals

One in five Britons that has been in employment for over a year has not received a job appraisal with their current employer according to Enterprise Study. The main reasons for the lack of appraisals include management teams being "too busy" (38%), working in a "small environment" (35%) or working in an "informal setting" (19%). However, 63% of those polled said they’d feel happier if they had an appraisal, with a further 38% saying they’d welcome some constructive criticism.

18 December 2015

2015 ends on positive note with good news on jobsEmployment is up; unemployment is down and the youth unemployment rate has fallen to its lowest level for more than ten years.

The latest labour market statistics from the Office of National Statistics (ONS) shows that, in the three months from August to October 2015, employment was up 207,000 and unemployment was 110,000 lower.

It means that job growth in the UK has "well and truly recovered" said Mark Beatson, chief economist at the CIPD, the professional body for HR and people development.

David Kern, chief economist at the British Chambers of Commerce (BCC), said: "This is an encouraging pre-Christmas set of figures, with employment rising to a record high, unemployment falling, and inactivity declining. Overall these figures demonstrate that our flexible and vibrant labour market remains a source of strength for the UK economy."

Small businesses are playing a key part in the positive employment picture, according to John Allan, national chairman of the Federation of Small Businesses (FSB). He said: "The continuing growth in employment and wages is further positive proof of the ability of the private sector, and small firms in particular, to create good quality jobs."

Despite the good news, Allan cautioned: "FSB research confirms smaller businesses are playing their role in job creation despite a cooling of confidence in recent months. This is likely to reflect a number of upcoming policy changes that businesses are grappling with, including higher than expected minimum wage increases, auto-enrolment deadlines, and changes to how dividends are taxed.

"With many of these challenges due to hit smaller businesses simultaneously in the early half of 2016, we encourage ministers to monitor the situation closely and be prepared to consider extra transitional support for small firms if the jobs market shows signs of cooling. Crucially, we would urge against any further measures that raise the cost of doing business at this time."

The ONS figures also show that in the same period, the annual growth in average earnings fell to 2.4% including bonuses and to 2% excluding bonuses.

The CIPD's Mark Beatson said: "Wage growth remains subdued, and this makes it less likely that we will see interest rates increase during 2016. With very low inflation, the average pay packet is still increasing in real terms, but this will only be sustainable if productivity increases. This will require organisations to invest in technology, new systems and their workforce."

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18 December 2015

Lack of skills and funding hold back start-upsBritain's start-up revolution is being undermined by a skills shortage and continued difficulties obtaining finance, according to a new poll of entrepreneurs by the Institute of Directors.

The first ever survey of the IoD 99 network - a group of more than 650 entrepreneurs under the age of 35 - has revealed that finding skilled employees and accessing scale-up finance are the most important issues for Britain's start-ups.

The IoD poll found that 42% of the entrepreneurs surveyed say they have trouble hiring people with the right skills, and 39% cite difficulties accessing finance as a potential barrier to growth.

More than half (53%) said that money from family members had been instrumental in getting their business off the ground, while 56% had used personal unsecured finance, like credit cards, and a further 45% had used money from friends.

The survey also investigated the motivations of entrepreneurs and found that 21% said the primary reason for starting their business was to have a "positive social impact", 22% said they wanted to work for themselves and 36% said they wanted to build a successful company.

Jimmy McLoughlin, deputy head of policy at the IoD, said: "The start-up revolution has taken hold in Britain like nowhere else in Europe. With so many young, exciting and cutting-edge businesses having popped up in recent years, it is vital to harness their potential and create the next raft of world-leading companies. Finding people with the right skills, and tapping into the right mix of finance will be the biggest factors in achieving scale-up success. For start-ups, overcoming these obstacles can be the difference between success and failure."

The IoD has called for the Government to open up the "equity economy" to make it easier for savers to invest in young companies and turn Britain's fledgling start-ups into scale-ups. The business group has also warned politicians against imposing arbitrary restrictions on the UK immigration system, which will make it harder for growing firms to bring in skilled workers from around the world.

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18 December 2015

Personal Tax Accounts to transform tax in the UKHM Revenue and Customs has officially launched online Personal Tax Accounts and all SMEs will have their own accounts by April 2016.

The new HMRC accounts will allow people to see their tax details and make payments at any time. All UK small businesses, as well as personal tax payers, will have Personal Tax Accounts (PTAs) by April 2016.

A key advantage of the new digital tax accounts, according to the Government, is that they will stop the build up of tax due or refunds owed. It also says that the online service will make it easier to contact HMRC officials through services like web chat and virtual assistant.

Two million businesses are already using the new system. HMRC's aim is that by 2020 the new digital accounts will encompass all taxpayers, individual and corporate.

Before tax returns become redundant, however, businesses and the self-employed will have to update HMRC every quarter from April 2018, a significant shift from the current system of annual returns. This particular reform has been widely criticised by business groups and financial advisers.

Chas Roy-Chowdhury, of the Association of Chartered Certified Accountants (ACCA), has described it as "onerous".

John Allan, national chairman of the Federation of Small Businesses (FSB), said: 
"Adding more reporting appears out of step with wider Government attempts to reduce the regulatory burden and to streamline tax arrangements. Members already spend on average £3,600 completing their tax returns, with many still completing theirs manually."

He added: "We … want to see proper consultation with business groups and professional bodies, a clear statement of benefits to the business community and a package of support to help offset this new burden on business. The push towards digital must be introduced alongside tax simplification."

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18 December 2015

Are you reaching your digital potential?New research suggests that the majority of businesses have got a long way to go before they take full advantage of digital opportunities that could transform their fortunes.

A new report from Capgemini Consulting,Organising for Digital: Why Digital Dexterity Matters, produced with MIT Center for Digital Business, concludes that few companies have successfully used technology to evolve into truly digital businesses.

The report is based a survey of business leaders across 28 countries. It has found that businesses are at a range of different stages on the journey towards what it calls "digital dexterity":

  • 7% exhibit a digital-first mindset, they have fully digitised operations, can spot emerging trends and have significant digital skills;
  • 21% are in the "engaging" phase, with digital capabilities in personalising customer experience, simplifying routine tasks and enabling collaboration;
  • 56% are in the "initiating" phase, slowly building their digital competencies;
  • 16% of organisations are "stalling", without any significant digital capability.

Didier Bonnet, senior vice president for digital transformation at ‎Capgemini Consulting, said: "During electrification, productivity surged only after firms had radically redesigned how they organised - from the physical factory layout to the introduction of the assembly line and greater job specialisation. This was a radical shift that did not happen overnight. It took some 20-30 years to evolve. Our conviction is that something very similar will happen with digital transformation. It will require major surgery to evolve our traditional industrial organisational models into digital ones. But we have no choice if we want to fully benefit from this digital revolution."

Capgemini has identified a number of attributes that set the "digitally dextrous" apart from the rest. These include: a digital-first mindset; systematic experimentation to drive innovation; the ability to self-organise quickly around new digital opportunities; and empowering your workforce.

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11 December 2015

SMEs paying £500 million too much for energySmall firms are paying too much for their energy because they find it hard to shop around for deals and almost half have never switched suppliers.

The Competition and Markets Authority, which is currently investigating the energy sector, says SMEs in the UK pay around £500 million more a year than if competition was functioning effectively. It has voiced concerns that 45% of SMEs have been placed on a default tariff, which can be more than twice as expensive as a negotiated tariff.

Research by the Federation of Small Businesses (FSB) among its own members has found that 70% of firms experience difficulty comparing energy tariffs and 43% have never switched supplier.

The FSB is launching its own Energy service for members that promises to reduce average energy bills by almost a quarter. The service will be run by Make it Cheaper and the FSB says it could generate annual average savings of 23% for new customers switching their gas and electricity provider - equivalent to £973 off the £4,243 average annual energy bill of an FSB member.

The service will enable FSB members to get advice on rates, identify potential savings and arrange new contracts. It will also take care of the paperwork involved in switching and will remind members when their fixed price periods end so they don't "default" on to more expensive rates.

Dave Stallon, FSB operations director, said: "Energy is an increasingly important issue for smaller businesses. There are many ways they can make substantial savings through the implementation of energy efficiency measures as well as ensuring they get the best tariff they can on their gas and electricity. Many smaller businesses, however, either don't believe they can make substantial savings or haven't trusted the market and the system enough to engage in the process."

Energy efficiency has the potential to cut SME energy bills by 18-25% according to estimates by the Department of Energy and Climate Change (DECC).

FSB research has found that 58% of businesses have already made changes to improve their energy efficiency. The most widely reported energy efficiency measures already taken are: the installation of more efficient lights, lamps and bulbs (40%); the introduction of switch off/turn down policies (23%); and improved insulation (23%).

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11 December 2015

A new process intended to make it easier for small firms to apply for R&D Tax Credits is too complex, a tax specialist has warned.

11 December 2015

A new process intended to make it easier for small firms to apply for R&D Tax Credits is too complex, a tax specialist has warned.

11 December 2015

A new process intended to make it easier for small firms to apply for R&D Tax Credits is too complex, a tax specialist has warned.

11 December 2015

Businesses urged to get ready for the Living WageThe Government is advising businesses to prepare for the National Living Wage well in advance of its introduction in 2016.

The new National Living Wage (NLW) becomes law on 1 April 2016. Firms are being advised to take some simple steps to prepare for the legislative changes. All employees over the age of 25 will be eligible for the new rate of £7.20 per hour. Businesses need to update their payroll systems and communicate the changes to staff.

A survey conducted by Censuswide for the Department for Business, Innovation and Skills (BIS) in November 2015 polled 1,000 UK employers about the Living Wage. It found that, despite the fact that 63% of employers said they know which of their staff should be receiving the new Living Wage, most of those polled had yet to prepare for the change.

The findings reveal that 45% of employers had updated their payroll systems in anticipation of the new rate; 39% had communicated the upcoming changes to staff; and 29% had looked online for more information about National Living Wage entitlement.

Recent research by HR body the CIPD found employers plan to improve efficiency and productivity to help meet the cost increases.

Mark Beatson, CIPD chief economist, said: "The National Living Wage was a bombshell for most employers when it was announced in July. It comes into force next April, which does not give employers a lot of time to prepare, hence we found 26% of employers in September saying it was still too soon to say how they would manage the cost implications."

However, the findings of the BIS survey show that most employers are positive about the introduction of the National Living Wage:

  • 93% of all bosses agreed the National Living Wage was a good idea;
  • 88% said it would make staff more productive;
  • 83% believed it would make staff more loyal towards their employer;
  • 86% said it would boost staff morale.

Business minister Nick Boles said the Living Wage "will provide a direct boost to over two-and-a-half million workers in the UK - rewarding and providing security for working people. I am urging businesses to get ready now to pay the new £7.20 rate from 1 April 2016."

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