UK Small Firms plan move Overseas
More than a quarter of UK firms are considering relocating overseas to escape excessive red tape, according to research by entrepreneur think tank the Tenon Forum.
According to their survey of more than 1,000 SMEs, 26% are considering a move within the next three years, while one in 20 have already made firm plans to relocate abroad.
The research revealed that dissatisfaction with the UK’s legislative environment, combined with the effects of the economic slump, has caused many business owners to think about leaving the UK to set up elsewhere. Tenon head of tax Andrew Jupp said
“Entrepreneurs are genuinely struggling in the current legislative and economic environment and the Government must heed this call for help in order to avoid losing some of the country’s most talented business people,” .
The Department for Business, Enterprise &Regulatory Reform (BERR) stressed that it was looking at ways to reduce the administrative burden of regulations on business by 25% by 2010.
“We are on track to meet this target and have delivered an estimated £800 million in savings of time and money so far,” said a BERR spokesman.
“But this is only part of the story,” he added. “As part of creating the best environment for small businesses, we are simplifying legal requirements and using common sense risk assessment when inspecting low–risk businesses. We are also looking at whether small firms can sensibly be exempted from new, and existing, regulation, to lighten the burden further but still ensure safety and protection for firms, employees and consumers.”
Jupp warned businesses that the long–term benefits of moving overseas needed to be considerable.
“The biggest risk is that the legislative environment in the new country is often just as complex as the UK,” he said. “If business owners are not familiar with the structure, it could make life extremely complicated.”
“If you have an established business that you decide to take out of the country, you will also trigger a capital gains tax charge, based on the value of the business, which could be considerable,” added Jupp. “Not to mention the need to assess how your whole business will work, from IT infrastructure to recruiting a skilled labour force.”
If you are thinking about relocating, read our moving premises article.