1. An unequivocal good news items
A tax reduction is always welcome and on 1st April the main rate of corporation tax for companies will reduce to 21 per cent. This is part of the Government’s stated commitment to improving the tax environment for entrepreneurs and risk takers and will be generally well received.
2. A developing trend that any entrepreneur looking to grow his or her business should monitor – crowdfunding
There is growing evidence of interest in crowdfunding as a means of financing young and growing businesses and the FCA has already licenced some of the key players. An FCA consultation paper on the sector closed before Christmas and a policy statement is due in March. Watch this space.
3. Employee share options
The anecdotal evidence of an upturn in the SME sector has gathered pace in recent months and with that upturn has come an increased interest in incentive schemes for employees and key staff. We recommend that all young businesses look at share incentives as part of their packages for staff.
4. Hedging mis-selling
This is a big issue, too big for any detail in this note, but if you think you may have been mis-sold a hedging product by a bank, look first at the FCA website to see if you can opt in to the independent redress scheme. If not consider taking independent advice but be careful about your costs budget.
5. If you are an LLP look very carefully at your remuneration structure for partners
Rule changes coming into effect in April are likely to mean some partners will have to be treated as employees unless you alter your profit sharing arrangements now. This may involve injecting money into your business as capital so it needs to be addressed sooner rather than later.
6. Consumer rights
If your business sells goods to consumers then you probably need to know about the Consumer Rights Directive. This is another piece of EU derived legislation which the UK has to implement by June 2014 and it covers rules for the supply of goods & services, and unfair terms in contracts as well as giving the new powers against business for those enforcing the rules.
If you are buying or selling a business these rules are designed to protect employees. They’ve often, sadly, had the opposite effect and the Government plans to change the rules this year to simplify them. This will be very welcome and should make life easier for small businesses trying to negotiate this legislative minefield.
We’ve all heard about the pensions “time bomb”. All businesses are now on a path to compulsory auto-enrolment. This is a new set of rules obliging employers to pay into a pension for employees who are aged between 22 and the state retirement age and earn over £8,105 a year. By February all employers with over 250 staff will have to have enrolled and by April 2015 all employers with between 50 and 250 employees will need to have enrolled.
9. Intellectual property protection
It sounds very dry and lawyerly, but your “IP” and brand, have probably never been more important and its never been easier to protect them. If you haven’t already done so, we recommend looking at what you might do to protect your key IP, even if it is only registering your brand as a trademark. It’s certainly easier and cheaper than arguing with someone who tries to register ahead of you.
10. A strategy for growth and exit
All business owners know they need to do it, and most have a shrewd idea of what they probably need to do. It’s just finding the time to do it. Put some time aside now, with a suitable adviser if you think it would help, to work out your strategy for growing and, if appropriate, exiting your business.
Jonathan Thornton is Head of the Corporate & Commercial Team at Russell-Cooke LLP.
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