Expert commentary on companies that have made the list three years running
Consistency and coherency are key
Mike Cherry, Policy Director of the Federation of Small Businesses
It’s always heartening to see smaller businesses being recognised for their creativity and innovation. This latest edition of 1,000 Companies to Inspire Britain provides a great opportunity to showcase some of the UK’s most exciting, fast-growing smaller companies. It’s these kinds of companies that are helping to drive economic growth, raise productivity and contribute to providing a skilled workforce. So, their ambitions to grow must be supported and nurtured by both government and organisations like the Federation of Small Businesses.
In 2015, we saw a change of government in the UK. Ministers have since worked closely with us on how to support smaller firms, not least by keeping the smallest companies out of the business rates system, and toughening up targets to get ultrafast broadband to business premises.
Like many smaller firms, digital transformation is a major focus for the government. We applaud efforts to give our members more opportunities to interact with government departments online to help them fulfil their company obligations. But we are deeply concerned about the recently announced plans by HMRC to enforce mandatory online quarterly reporting of tax submissions. It is unclear how this fits in with government attempts to streamline and simplify tax arrangements, let alone their clear mission to reduce regulation on business by £10bn.
“We need to have a much longer-term strategy in place to support business and boost skills”
There are other challenges that smaller businesses are preparing to face. On 1 April 2016, the new National Living Wage and changes to tax on dividends both come into force. At the same time, there is great uncertainty around pensions auto-enrolment rules, which all employers need to comply with over the next two years.
In addition, small firms must be able to rely on customers – not least larger businesses, government departments and local councils – to all pay invoices on time, and yet poor payment practices remain a major problem. The new Small Business Commissioner will be charged with dealing with late payment and once the appointment is made, we look forward to working together to finally make some headway on this issue
15.6m – The number of people small and medium-sized firms employ in the UK
To create a truly entrepreneurial environment for smaller businesses to flourish, a consistent and coherent approach to business support must be in place. While government has started to address waste and duplication of schemes, we need to have a much longer-term strategy in place to support business and boost skills.
This remains a particular area of concern. Smaller businesses will be key to the government’s goal of making Britain the best place in the world to start and grow a business, not just for these 1,000 companies but all of their 5.4 million counterparts right across the UK.