The Small Business, Employment & Enterprise Act (SBEE) became law on the 26th March 2015. Ostensibly introduced to "make the UK the best place in the world to start and grow a business", the wide-ranging law addresses 11 major business areas. Here we'll focus on those most likely to impact UK SMEs in the short to medium-term.
We've previously raised concerns over small businesses being overly reliant on debt, and mistrustful of equity finance. So we're pleased to see SBEE going some way towards solving these problems.
It does this primarily by helping those who have been refused a loan by one of ten "big banks". After a refusal, the banks will be required to offer businesses the chance to be united with a suitable alternative lender via a dedicated online database. New initiatives will also help businesses understand the alternative credit options available to them, and new "challenger banks" will be created to compete with the big lenders.
From our perspective, ensuring healthy cashflow is a far more important and long-term solution than taking on more debt and SBEE has, thankfully, recognised that. Large companies with 250+ employees are now required to review their payment procedures twice a year, reporting the results back to central government.
A raft of measures aim to make it easier to set up and run a small business. These include a simplification of registration processes, including incorporation and tax registration, plus changes to accounts filing procedures to remove duplications.
A few, however, add responsibilities. For example, exclusivity clauses must be removed from zero hours contracts, and companies must now contribute to a publicly available register of people with significant control over a company. There are also increased sanctions against those who pay below minimum wage.
Businesses with more than 250 employees will also be required to publish the difference between average pay for male and female employees.
The final innovation of SBEE is to introduce a Small Business Appeals Champion, whose remit is to improve engagement between regulators and the regulated, making it quicker, easier and cheaper for businesses to challenge and appeal decisions, as well as to better facilitate complaints and suggestions for improvements.
For more advice on how to improve your business cashflow, contact a Dukes Bailiffs advisor today.