Turner Little look at Government regulation which is often is a big issue for small to medium sized business owners to get around.
Government regulation (often referred to as ‘red tape’) is a big issue for small to medium sized business (SME) owners. A 2015 study from the Forum of Private Business, a lobbying group for UK small businesses, estimated that red tape costs SMEs close to £41 billion per year.
You need to ensure your business complies with the relevant law and regulation involved in starting a business. Failing to comply with regulation might impose extra costs on your venture that you can’t afford to meet later down the line. Here Turner Little outlines five key start-up ‘red tape’ issues you need to be aware of when establishing your own company.
Intellectual Property
The unique creations e.g. designs, symbols, inventions, literary works etc. you use to build a successful small business are called ‘intellectual property’ (IP). Figures from the Federation of Small Businesses (FSB), an organisation which represents UK SMEs, show that one out of every three small organisations with IP rely on it to generate 75% – 100% of their revenue. Therefore, you’ll need to protect your firm’s IP to build up a successful enterprise.
IP refers to a range of things including copyrights, designs, patents or trademarks. When you start your company learn about the differences between these and whether they apply to your venture, so you safeguard your business’ IP effectively. We should note that your venture’s logo is a trademark, so you might want to utilise Turner Little’s trademark services to protect your IP in this case.
Insurance
Companies that hire at least one member of staff must have an ‘Employers Liability Insurance’ policy in accordance with the Employers Liability (Compulsory) Insurance Act 1969. This policy will cover your small business against liability for any injuries or diseases your staff incur at work.
No two businesses are the same, so when deciding what type of business insurance you’ll require, conduct extensive research. Also, educate yourself on relevant business insurance terminology. For example, the British Insurance Brokers’ Association (the UK insurance industry trade body) ‘jargon buster’ is a useful resource. This’ll allow you to negotiate a business insurance package that provides your company with extensive cover in unforeseen circumstances.
Employment regulations
As well as taking out Employers Liability Insurance’ policy, there are a number of other regulations you’ll be required to deal with when your start-up hires staff. First, you’ll need familiarise yourself with UK business health and safety regulations to ensure your staff are safe in the workplace.
As a small business leader, you’ll also need to learn about UK national minimum wage rates, to ensure you’re paying your employees correctly. Furthermore, find out about UK employee discrimination law, to ensure you respect your employees’ rights e.g. parental leave. Fall foul of any of these regulations and your small enterprise could incur significant financial penalties, so fully acquaint yourself with UK employment legislation when you start a business.
Digital Regulations
You may be planning to establish a digital business that sells products and services online. A study conducted by online marketplace eBay indicated that 49% of digital SMEs believe they’ll expand their ventures in 2016. But you must ensure you comply with UK digital regulations in order to build a thriving online venture.
First, familiarise yourself with The Privacy and Electronic Communications Act 2003. This will show you how to conduct online communications in accordance with UK law. If you fail to comply with the regulations and do something such as send unsolicited marketing emails, your small business will suffer the consequences. Also, ensure any software your company utilises is properly licensed, so you don’t end up using counterfeit software, which is illegal.
Tax law
Finally, if you’re self-employed you’ll need to comply with UK tax law, so it’s vital that you familiarise yourself with your business’ tax obligations. For example, learn about how to use the Pay As You Earn system to send your staff’s income tax and national insurance contributions to HM Revenue and Customs. If you expect your firm’s revenue to exceed £82,000 you’ll need to register for Value Added Tax; you’ll then need to charge your customers VAT and pay it to the government.
Use this government website to read about different business taxes and under what circumstances you might be required to pay them. There are a range of financial obligations attached to running a small business, so you’re going to require effective banking facilities to ensure you comply with UK tax regulation. Turner Little provides the UK banking services you need to make sure your small business can deal with key red tape issues, and succeed long-term.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agents, Registered Bank Intermediaries and Business Consultants, as well as Trust providers.