This Friday marks the start of the new financial year – 1 April – when many of the government’s flagship measures impacting UK businesses will come into force. The country’s small firms need to be prepared.
Amongst the changes, the introduction of the National Living Wage is undoubtedly the most significant for both employers and workers in small firms, and the legislation has received comprehensive coverage on Business Advice. But there are a host of other measures that will have an impact too, with the potential to disrupt businesses if owners aren’t fully aware of them.
In terms of administration, managers of smaller companies could see more of their time taken up with red tape, as Companies House release a 70-page guide for registering people of significant control (PSCs).
In June, firms with less than 50 staff, as well as those with more, will need to submit a conformation statement registering directors, secretaries and any other individual who discretely wields influence or has control over how a company is run, over and above its shareholders.
At the same time, small businesses leaders who haven’t already had their staging date will be asked to commit to pension auto-enrolment. Owners should take action now to guarantee they’re ready for both measures coming in to force in tandem.
The managing director of the Forum of Private Business (FSB), Ian Cass, has this week been outspoken in his annoyance at what he sees as government hypocrisy over new administrative burdens on small firms. “When companies need directors to focus in growing their businesses, they are met with further bureaucratic compliance,” he said. “Running a business needs to be simplified and we are being told that the government is reducing red tape – yet at the very same time staff costs are rising for small employers through auto-enrolment and the National Living Wage.”
Indeed, recent FSB research has shown that staff-related costs were the biggest single cost for UK small businesses in 2015, with on 38 per cent of companies able to pass on price increases to customers.
Staff costs are unlikely to reduce after 1 April either, as small firms sponsoring skilled workers from outside the EU (Tier Two workers) will have to pay them £35,000 or more. To counter the potential added costs this will bring, George Osborne has frozen statutory family-related pay and sick pay rates – saving employers money but tightening the purse strings of workers themselves.
But perhaps the most damaging cost to small business owners should they forget to prepare in time is the fact that fines for failure to pay the National Living Wage will double come Friday. Leaders need to be aware that making this honest mistake could lead to big losses.
For Britain’s small firms, this week represents a good opportunity for some spring cleaning. Make sure you’re ready and waiting for the changes that may impact your venture after 1 April and you’ll be raring to go for the financial year ahead.
Read our expert’s opinion on why Britain has become one of the most exciting places to be an entrepreneur in 2016.
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