Your guide to issues affecting SMEs

posted by 4 years ago in Guide
Your guide to issues affecting SMEs

SMEs are the lifeblood of the UK economy by producing 60% of the UK’s workforce and providing half of all private sector turnovers so it is important to know what is happening around them and whether the changes occurring are going to benefit or destroy them.

The Apprenticeship Levy

The levy will go into force in April 2017 – the start of the second quarter. The scheme has been introduced to fund more apprenticeships across all sectors within the UK to uplift the skills shortage many are experiencing currently.

How will it work?

When the levy goes into action all employers will have to contribute 0.5% of their payroll to the government, however, this will only affect employers with a turnover of £3 million plus per year.

The employer will then gain access to a ‘digital apprenticeship account’ this is where the money will sit for 18 months until used. If the money has not been touched for an apprenticeship then it will be put into a different account where other employers can access it. Solicitor of HRC Law in Manchester, Simon Whitehead said;

“This means that the cost of employment will increase for employers with a payroll of more than £3 million per year. To ensure that a business achieves some return they will need to review their use of apprentices, ensuring that they are being used to full effect.”

Auto-Enrolment for Pensions

The auto-enrolment has been introduced to support workers once retired. It is a form of saving for retirement that has been arranged by your employer.

How will it work?

Every employer within the UK must ensure they have selected several of their employers into the pension scheme – ‘automatic enrolment.’

A percentage of what you’re paid each month will go into your pension scheme automatically so will never have to do anything. Peter Byrne, partner at Taylors Solicitors said;

“Auto-enrolment has been on the agenda for a long time and, where larger employers are now at the stage where they have to start looking at it.”

The National Minimum wage & The National Minimum Living Wage

Although this is currently subject to review; the current main national wage will be £6.95 as of October 2016 for those aged 21-25 those above the wage increased to £7.20 during April this year, in October this will not go up.

However, both are subject to change during April 2017. Simon Whitehead comments;

“The consultation is looking at the correct rates working towards the government’s stated intention for it to rise to £9 by 2020.

“The Low Pay Commission expects the NLW to increase to £7.60 in April 2017. The commission is also looking at compliance and enforcement.”

The Director of Labour Market Enforcement

Making its way through Parliament as a part of the Immigration Bill the legislation will generate a director of labour market enforcement and an offence of aggravated breach of labour market legislation.

How will it work?

The enforcement bodies will have the control and influence to call for a business that has experienced an offence within. They will take measurements to prevent it from happening again.

Modern Slavery Act

For companies with a turnover of £36 million and more that includes subsidiaries of foreign business they are obliged to deliver a Slavery and Human Trafficking Statement which will highlight what they have done to guarantee modern slavery does not exist within their company/supply chain.

If they fail to show evidence that they have done all they can to ensure it is not happening amongst their business/supply chain then they could face the secretary of state gaining an injunction which will force the business to comply and produce one.

EU Referendum (Brexit)

With so much going on it is hard to keep up with the EU Referendum/Brexit – especially for businesses. Stats from a survey conducted by Close Brothers has found that out of 900 SME decision makers 44% wish to remain with the EU, 39% believe we should leave the EU in order to benefit their business and the UK generally and then that leaves just 17% of the 900 undecided about whether leaving will hurt or benefit the UK. However, with new polls being run almost daily it’s difficult to pinpoint what the outcome’s likely to be.

How will it work?

During June 2016 the vote will be offered to the public – obviously, if the majority vote ‘yes’ the UK will depart from the EU. However, as there is so much involvement within the EU it is hard to say when the full departure will take place, unlike usual resignations which normally involve a month’s notice or sometimes it can even take place with immediate effect.

Gender Pay Gap – New Rules

After it was confirmed that businesses with 250 employees and more found that women were paid 20% less than their male colleagues’ plans announced by Women and Equalities Minister, Nicky Morgan that those businesses will have to reveal what their pay difference is between their male and female employees.

How will it work?

From April 2017 business owners will have to start calculating the pay gap between colleagues 12 months before the first table is published. The highest ranking country for equal pay is Iceland and the worst is Egypt.