Introduction of The Small Business, Enterprise and Employment Bill 2014 – 2015 to Parliament
11th August, 2014
The Small Business, Enterprise and Employment Bill 2014 – 2015 was introduced to Parliament on 25 June 2014.
Its goal is to “reduce the barriers that can hamper the ability of small businesses to innovate, grow and compete.” Signaled as a helping hand to SMEs, the legislation introduces a raft of changes on a range of issues.
The Bill aims to:
– Increase transparency around who owns and controls UK companies through the creation of a central registry of company (beneficial) ownership information. A beneficial owner would include any person who holds 25% of a company’s shares or voting rights, or who otherwise exercises overall control over the company. This will also apply to LLPs.
– Impose fines on foreign companies who take over British firms, where they do not honour certain commitments, such as safeguarding jobs.
– Introduce a framework for reforming whistleblowing legislation; requiring prescribed persons to publish an annual report detailing disclosures made (to encourage best practice procedures).
– Provide government with the ability to introduce measures, to give small firms fair access to public sector procurement contracts and to make public sector procurement practices more streamlined and efficient. Such measures are yet to have been identified but are likely to follow in secondary legislation.
Access to Finance
– Improve SME access to finance by opening up small business credit data to improve competition and make it easier for businesses to seek a loan from a lender other than their bank.
– Increase trade credit availability for SMEs by enabling HMRC to share non-financial VAT registration data on a ‘controlled basis to qualifying organisations’.
– Introduce requirements for the government to publish and report on deregulation targets in each parliamentary term. Regulations affecting SMEs will be regularly reviewed, assessing their relevance and effectiveness.
– Make exclusivity clauses in zero hours contracts unenforceable, preventing employers suing a ‘zero hours’ worker for being employed elsewhere. The legislation also reserves powers for the Secretary of State to make further provisions in relation to ‘zero hours’ workers.
– Sanction tougher penalties for employers found to be in breach of national minimum wage legislation, applying the maximum penalty on a per worker basis, rather than per notice basis.
It is too early to say whether the changes outlined will have a real impact on small businesses, but improved access to finance and promises to reduce red tape are moves certain to be welcomed by the small business community. The Bill passed its second reading in the House of Commons last week with a view to becoming law in March 2015, ahead of the general election.
Aaron & Partners LLP is able to advise on all aspects and issues which small businesses may face. For further advice or information please contact Stuart Scott-Goldstone on 01244 405555 or at [email protected]
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