Institute of Directors

Small Businesses Put Hiring On Hold Following Brexit Result

Small Businesses Put Hiring On Hold Following Brexit Result

25% of UK businesses intend to put a freeze on their recruitment processes following Friday’s EU referendum result in which Britain voted to leave the EU, according to a report from the Institute of Directors. Surveying 1,092 business leaders, over 60% of those surveyed said they believe that Brexit will be bad for their business while 20% said they are now considering moving their operations abroad. Approximately 33% of business owners said their hiring activity would continue at the same pace but 5% conceded that they will have to make some staff redundant. With small businesses now preparing for life outside the EU, more than half of business owners want the government to prolong negotiations with the EU, rather than a quick break, in the hope of Britain getting a better deal. Simon Wal... »

Banking Shake-up May Be Costly for Small Businesses

Ring-fencing the UK’s retail banking system could increase the costs of lending for small firms, business groups have warned. A report (PDF) by the Independent Commission on Banking (ICB), headed by Sir John Vickers, has set out a series of key recommendations including ring-fencing the banks’ high street operations ― such as loans and overdrafts for small firms — in order to protect them from riskier investment banking divisions. Banks would also be required to set aside more cash to cushion them from future losses. In addition, the report proposed increasing the competition between banks by making it easier for customers to switch providers. The protective measures are designed to “make it easier and less costly to resolve banks that get into trouble” ... »

IoD: Moratorium on Red Tape not enough

The Government’s pledge to exempt the smallest businesses from new domestic regulations doesn’t go nearly far enough, the Institute of Directors (IoD) has said. The Chancellor confirmed in the Budget that the Government is introducing a three-year exemption from all new domestic regulation for small firms with fewer than ten employees, and will open a consultation on how this will be introduced. The IoD said that there was a danger that these micro businesses would be hit with an unmanageable red tape burden after the moratorium is removed. The business group also said it was “disappointed” that the moratorium on red tape was only temporary, applies to only the smallest firms, and does not tackle existing administrative burdens. “Over time, the Government needs to make the exemption ... »

Management, Leadership and Tech Skills Shortage Shackles Firms

In its latest skills survey, the Institute of Directors (IoD) reveals that the growth of nearly 60% of businesses is being held back by a lack of skills in the wider workforce and among existing employees. The IoD calls on the Government to improve the overall business environment by scaling back business taxes and employment regulations, including the misguided Time to Train policy, so that firms have more resources to invest in training. Commenting on the survey results (full details below), Miles Templeman, Director-General of the IoD, said: “It is disturbing that at a time of economic weakness, the growth of the private sector is being held back by skills shortages. Businesses want to invest in training and are doing so on a large scale already, but they would invest even more if... »

Business Groups Welcome Office of Tax Simplification

A new tax body set up by the Government to unravel the “spaghetti bowl” of complex tax laws has been broadly welcomed by business groups. The Office of Tax Simplification (OTS) task force, made up of a board of senior tax experts, is expected to deliver two reviews before the Budget next year. The first will look at all 400 tax reliefs, allowances and exemptions to see how they can be streamlined, while the second will focus on ways to simplify the tax system for small businesses, including finding a simpler alternative to IR35 legislation. IR35 was brought in ten years ago to tax “disguised employment” among contractors and freelancers. According to the British Chambers of Commerce (BCC), the establishment of the OTS was a “necessary and long overdue response... »

Beating The Recession

Small firms optimistic despite the Recession

Small businesses are remaining upbeat about the year ahead, despite the gloomy outlook for the 2009 economy. Research from Orange revealed that a fifth of small firms are optimistic about the next twelve months and a third believe it will be a hard start to the year, but will pick up later on. Only 32% of small firms believe they will struggle to cope with the downturn. Orange UK vice president for business, Paul Tollett said: “It is encouraging that over half the respondents of the survey are optimistic for 2009 or believe that things will pick up throughout the year,”. “We must ensure we do what we can to drive this optimism into action and get British business back on its feet.” The survey also found that only a quarter of small firms said their credit facilities... »

Lord Mandelson – Prompt Payment Code

Government payment code helps small firms’ cashflow

The Government has introduced a Prompt Payment Code to help increase the speed of payments from large companies to small businesses. Drawn up in partnership with the Institute of Credit Management (ICM), the voluntary code aims to encourage prompt payment of invoices and encourage good practice in business to business deals. Leading suppliers are being urged to pledge their commitment and use it to underline their reliability. Asda, British Gas and John Lewis Partnership have already signed up to the initiative. While the code does not specify how quickly companies should settle their bills, it states that companies should ‘pay suppliers on time within terms agreed at the beginning of a contract.’ Suppliers will be able to raise concerns about late payers on the ICM website. Lo... »

Christmas parties less costly than firms think

According to the Association of Chartered Certified Accountants (ACCA), Businesses should not cancel their Christmas parties without working out the costs involved, as they can be cheaper than expected. Recent research from the Institute of Directors found that more than a quarter of businesses are cutting back on expenses this year, including paying for a Christmas party. However, ACCA head of taxation Chas Roy–Chowdhury said businesses can reduce the cost of parties by taking advantage of tax savings. He pointed out there will be no taxable benefit in kind for employees as long as costs are kept under £150 per head. “As long as parties are open to all staff, up to £150 can be spent on each employee that is tax deductible, with another £150 on each employee&r... »