Small businesses championed in Queen's Speech

Thursday 5 June 2014

Limited companies and sole traders received yet another boost yesterday (June 4th) as the Queen delivered her annual speech.

The monarch unveiled the government's current agenda, which included the introduction of the small business, enterprise and employment bill.

This draft legislation is designed to make it easier for small businesses to access finance, while improving payment practices between companies and their consumers.

What's more, the bill is expected to make it easier for small firms to gain fair access to the £230 billion spent annually in public procurement contracts.

Meanwhile, the proposals will also ensure red tape regularly undergoes review to make sure regulations are either abolished or changed to remain effective for small businesses.

This will all help to improve the UK's reputation as a "trusted and fair place to do business," supported by regulations to improve transparency surrounding who owns and controls British companies.

The government is also hoping to make it easier for small businesses to grow overseas, improve fairness for sole traders and small businesses that run tied pubs, increase the flexibility of childcare regulations to meet the needs of working families and prevent highly paid public sector workers from keeping redundancy payments when they come back to the same part of the sector in a short period of time.

In addition to the small business, enterprise and employment bill, a National Insurance Contributions bill will be introduced to tackle avoidance. The Queen explained that the collection of Class 2 National Insurance Contributions (NIC) will be simplified for the self-employed by moving to self-assessment. This means it will take place alongside Class 4 NICs, with effect from April 6th 2016.

Meanwhile, legislation will be introduced to create follower notices and accelerated payments in tax avoidance cases. The former will allow HM Revenue and Customs (HMRC) to give a notice to those that had used avoidance schemes that had failed before the courts in another party's litigation.

Accelerated payments will apply in NIC disputes where a follower notice has been issued and the taxpayer has decided not to settle. HMRC can also seek accelerated payments in instances where taxpayers have been involved in schemes that had to be revealed under the Disclosure of Tax Avoidance Schemes rules and the General Anti-Abuse Rule. This will only apply when the Advisory Panel has determined that the arrangements were not reasonable.

Furthermore, a targeted anti-avoidance rule will be introduced to deal with cases involving offshore employment intermediaries and employment intermediaries facilitating false self-employment.

A bill covering high risk promoters of avoidance schemes will also be created. It will echo tax provisions currently laid out in the finance bill and will allow HMRC to give notices to promoters of tax avoidance schemes and monitor those who have breached a conduct notice.

Additionally, monitored promoters will be exposed to new information powers and penalties, while clients will have to meet certain obligations.

James Roberts, Digital Content & Development Manager at Brookson, said: "The focus on small business, such as limited companies and sole traders, in the Queen's Speech was a clear sign of just how important the self-employed workforce are for the UK economy. It's long been recognised that small companies can be the drivers of growth, but without the legislative support and policy in place, it can be difficult for businesses to reach their full potential.

"The Queen's Speech was a step in the right direction for small companies and laid down several changes that should make life easier for this group of entrepreneurs. In addition to this, the government have expressed their commitment to making the tax system fairer for all those that comply with the law.


By Victoria McDonnell

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