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For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.

Forming your business correctly is essential to ensure you are protected and you comply with the rules. Learn how to set up your business.

It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.

Businesses and individuals must account for and pay various taxes. Understand your tax obligations and how to file, account and pay any taxes you owe.

Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.

Learn why business planning is an essential exercise if your business is to start and grow successfully, attract funding or target new markets.

Marketing matters. It drives sales and helps promote your brand and products. Discover how to market your business and reach your target customers.

Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.

Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.

It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.

Few businesses manage the leap from start up to high-growth business. Learn what it takes to scale up and take your business to the next level.

February 2016

26 February 2016

SMEs rush to take dividends ahead of tax hikeOver a quarter of SME owners plan to take special dividend pay-outs ahead of forthcoming tax rises in April 2016.

A survey by accountancy firm Moore Stephens has found that 28% of small business owners are planning to pay themselves a special dividend before April when new tax rates come in for dividends.

There will be a £5,000 tax-free allowance under the new rules but above this basic rate taxpayers will pay 7.5% on their dividend income. Higher-rate taxpayers will pay 32.5% and top-rate taxpayers will pay 38.1%.

The survey also found that 21% of small business owners plan to reduce their dividend pay-outs once the changes come into force, while 6% expect to increase dividends to maintain their net income.

Mike Cooper, partner at Moore Stephens, said: "Small business owners are moving quickly to take out money from their businesses at a lower tax rate. Providing the accumulated profits are there, it is a perfectly sensible move and undertaken in the right way is something that HMRC has absolutely no issue with. However, SME owners who do not pay a special dividend before April 6 will have missed out."

Cooper warns that the changes to dividend tax "will hit small business owners very hard" and says SME owners "should be thinking seriously now about how much of the value they have built up in their businesses that could sensibly be extracted before the April 6 deadline."

Despite the changes, Moore Stephens says that dividends remain the most tax-efficient form of remuneration for many business owners. "While the increased tax on dividends is unwelcome, it is still marginally less than the tax on earnings, even though the difference between the two has been narrowed," Cooper said.

He added: "This is going to be a tough adjustment for many SME owners. That makes it even more important that they think seriously now about whether to mitigate some of the impact that these changes will have on their income levels next year."

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26 February 2016

Think tank calls for more help for self-employedAn independent think tank is calling for a new "welfare settlement" to support the growing numbers of self-employed workers in the UK.

A new report from think tank Bright Blue has highlighted the plight of many of the UK's low paid self-employed workers. Its findings show that 20% of self-employed people are in low income households, compared to 10% of employees. It means that over 900,000 individuals are self-employed and in a low income household.

The research also found that:

  • Self-employed individuals in low income households work markedly more hours on average (38 hours per week) than employees in low income households (26 hours per week);
  • However, self-employed individuals on low income are overwhelmingly satisfied with their job (80%), and are more satisfied than employees on low incomes (74%);
  • 75% of self-employed individuals in low income households say that their ambition is to sustain a good standard of living; just 13% say that it is to grow their business;
  • The top three challenges for self-employed workers are: income fluctuations (55%); lack of holiday pay (37%); and saving for a rainy day (36%).

David Kirkby, author of the report and senior research fellow at Bright Blue, said: "Earnings from self-employment have fallen in recent years and the self-employed are now more likely to be on low income than employees.

Self-employed individuals … typically experience significant fluctuations in their income, which can be difficult to manage. They receive only limited access to existing state welfare and have low savings rates."

Bright Blue is asking the Government to establish new personal welfare accounts for self-employed individuals that they would pay into and draw down upon in times of need, such as unemployment or illness.

Kirkby said: "This 'welfare settlement' would boost the financial resilience of the self-employed and boost the control and personal responsibility they have for insuring themselves against times of hardship."

Bright Blue is also proposing that Local Enterprise Partnerships (LEPs) should be financially incentivised to develop local advice networks for self-employed individuals and business owners within a given locality. In addition, it says, there should be a requirement for a certain proportion of LEP board members to be self-employed.

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26 February 2016

Business rate reform in the balanceThere are concerns that the Government is planning to water down its much-anticipated reform of business rates, due to be unveiled in next month's budget.

Business groups have called for a number of changes to the system including more frequent valuations of property and changes to the way the tax is calculated - based on the retail price index rather than the consumer price index.

However, The Daily Telegraph has reported that "it is understood that many of the key reforms British business has been pushing for will go unanswered" and it also said that "the Government is understood not to be in favour of either amendment".

The news comes as the Government predicts councils will collect a record £23.5 billion in business rates next year.

At the Autumn Statement in 2015 George Osborne outlined plans to devolve significant control over business rates to local areas, which would see local councils retain all the revenue they collect in rates and gain new powers to vary rates in some circumstances.

Dr Adam Marshall, executive director of policy at the British Chambers of Commerce (BCC), said: "Ministers have focused too much on devolving rates powers, and too little on addressing the deep-rooted failings of an outdated and poorly-designed system that places a crippling financial burden on many companies."

Ahead of next month's budget, the British Chambers of Commerce is calling for what it calls "bold action to fix the outdated business rates system", including:

  • A light-touch annual revaluation regime instead of revaluations every five years;
  • The removal of plant and machinery from the ratings system, which discourages businesses from investing in their premises;
  • The permanent abolition of the annual uplift multiplier, which doesn't take into account the performance of businesses; and
  • Forward plans for implementing a new regime with a reducing share of business rates revenue as a proportion of overall business taxation.

Marshall added: "Business rates hit companies hard before they turn over a single pound, and discourage investment in premises improvements, plant and machinery at a time when we should be encouraging investment in supporting future growth."

More on this topic:

26 February 2016

Misconceptions hold back would-be apprenticesWorries about pay and fears about committing to a career for life are stopping young people from taking up apprenticeships according to a new study.

Positive Outcomes, a Government-funded apprenticeships provider, questioned 227 young adults aged between 16 and 24, ahead of 2016 Apprenticeship Week.

The survey asked young adults why they are put off by the idea of doing an apprenticeship. It found that 22% fear that an apprenticeship sets them on a career path that they have to stick with for life.

In addition, 88% said wages were too low, 41% were concerned that apprenticeships aren't seen as a proper job and 30% assumed they'd earn more after going to university than through doing an apprenticeship.

Kelly Ball, joint managing director of Positive Outcomes, said: "The fact one in five thinks doing an apprenticeship pigeon holes you for life is a worrying point. This couldn't be further from the truth. Apprenticeships provide you with fantastic transferable skills and unparalleled business experience."

The research also suggests that there is still a "stigma of poor wages" attached to apprenticeships, said Ball. "It's clear that stigma is still firmly in place. People need to realise though that in 2016, this simply isn't the case. You'll often find employers are willing to pay more in a competitive marketplace.

"It's also important to bear in mind there are no associated costs with an apprenticeship - you are literally paid to learn, so elements such as university tuition fees aren't a factor. Competition for graduate jobs is fierce, but apprentices have invaluable practical experience which simply can't be replicated in any other learning environment."

Ball added: "A big element holding apprenticeships back from becoming the go-to educational career route is the misconceptions that surround them. Apprenticeships are a proper job. Those on apprenticeship schemes are treated in the same manner as any other employee and, in our experience, the vast majority end up with permanent employment at the end of their apprenticeship."

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26 February 2016

Start-ups look outside London to save on office costs

New data from Office Broker highlights the huge differences between the cost of office space in London and in other UK cities. The average cost of space per desk in the capital is £820 per employee per month. This compares to £200 in Newcastle and £150-400 in Birmingham. Its survey of start-ups has found that 58% said they would prefer to start their business outside of London.

Is your workplace making your staff happy?

The latest Leesman Index report into workplace effectiveness has shed light on the importance of the work environment for employees. The report finds that workplace design is important to 85% of those surveyed but only 54% agree the design of their workplace enables them to work productively. Tim Oldman, ceo of Leesman, said: "Our research suggests that two out of every five employees believe their workplace doesn't contribute towards a sense of community or create an enjoyable environment in which to work. This, along with a number of other factors, can seriously impinge both motivation and performance."

Appeal rejected in landmark holiday pay case

People who earn commission should see their holiday pay reflecting their full earnings, not just their basic pay, after an appeal in a landmark case has been rejected by the Employment Appeal Tribunal. The decision in the British Gas v Lock case secures the original ruling that holiday pay must take account of people who earn both commission and basic pay. It is the latest ruling in the case and it affects how employers calculate holiday pay under the EU Working Time Regulations 1998 (WTR). Previously, employees earning commission would only receive paid holiday leave based on their basic pay.

Workers sceptical about stress-related sick leave

Almost one in five British workers are sceptical about colleagues who take time off as a result of mental health issues such as depression, stress or anxiety, according to new research. A study by Willis PMI Group reveals that 48% of UK employees have worked with a colleague who suffered from mental health issues. It found that 14% do not believe stress is a genuine condition - despite the fact that 29% say they have suffered from mental health problems themselves.

19 February 2016

Self-employed should not be Business groups and the Government have welcomed the findings of a review of self-employment in the UK that says more must be done to support those that work for themselves.

The independent review has been led by entrepreneur Julie Deane, founder of the Cambridge Satchel Company. It is calling on the Government to give self-employed people the same rights as employees on issues such as parental leave, as well as asking for better education about self-employment and tax for young people.

There are currently 4.6 million self-employed people in the UK, 15% of the UK workforce. The report concludes that self-employment "should not mean that people are disadvantaged".

It said: "It is important that with the increased growth in self-employment, and the subsequent benefits that this group brings to the economy, that there are systems in place to support the self-employed in the same way as the employed."

Dr Adam Marshall, executive director of policy at the British Chambers of Commerce (BCC), said: "Julie Deane is right: it's time to sweep away the barriers that stop people from working for themselves. Her calls for the education system to focus more on the basics of enterprise, and for the self-employed to receive parental leave pay on the same basis as company workers, resonate with what we hear in business communities across the country."

Mike Cherry, policy director for the Federation of Small Businesses (FSB), said: 
"We encourage ministers to read this report carefully and take on board its recommendations. Particularly important are the recommendations to bring Maternity Allowance into line with Statutory Maternity pay and those relating to access to more flexible finance solutions. For too long the self-employed have been frozen out of getting fair access to mortgages, insurance products and pensions."

Commenting on the report, prime minister David Cameron said: "Up and down the country there are millions of hard-working self-employed people and I want to make sure they get all the support and security they need to achieve their ambitions."

However, Jason Kitcat, micro-business ambassador at Crunch Accounting, called on the Government to do more: "We welcome this report and support its recommendations … however, it doesn't tackle the bigger question of whether our tax and benefits system designed for a previous era is fit for purpose when so many people are making the positive choice to work for themselves. We must build on this report to make the case for a more radical rethink of how Government supports people in the new world of work."

More on this topic:

19 February 2016

Revealed - best UK cities for start-upsNew research into the UK's most entrepreneurial cities has found that Liverpool, Birmingham and Manchester are outperforming London.

Analysis of Companies House data by workspace providers the Instant Group has revealed wide differences in the number of new businesses starting up in leading UK cities when judged against population size. The most entrepreneurial cities, it has found, are Liverpool (pictured) and Birmingham, ahead of Manchester, Brighton, Glasgow and London.

Liverpool, for instance, has a population of 400,000 and 134,569 companies have been started there over the past two years, giving the city an "entrepreneurial population percentage" of 16%. Birmingham and Manchester are close behind with 14.5% and 14% respectively. This compares to 2% across the UK as a whole and 7.5% in London.

Tim Rodber, ceo of the Instant Group, said: "The strongest demand for space has come from the large cities outside of London where, proportionately-speaking, Manchester, Birmingham, Liverpool and Edinburgh are outperforming the capital. SMEs are hungry for space in these regions … enquiries for flexible space were up 21% for the UK in total and 39% in the regions."

Also this week, researchers at University College London's School of Management have studied the availability, quality and cost of amenities available to entrepreneurs in different cities across the UK, including broadband speeds, office space and the number and value of start-up loans.

Overall, they found that the top ten cities by these measures are: Bristol, London, Birmingham, Brighton and Hove, Nottingham, Edinburgh, Liverpool, Belfast, Cardiff and Leeds.

Topping the table for broadband speeds are Bristol and Portsmouth while reasonably-priced office space is available in Belfast, Brighton, Cambridge, Edinburgh, Exeter and Leicester. London gets first place for the average value of funding accessed by start-ups, at £1,038 per new business.

Chris Coleridge, director of the UCL MSc in Technology Entrepreneurship, said: "Entrepreneurs whose aim is to start a business this year should invest plenty of time in the planning phase, in order to research the pros and cons of not just their product or service, but of their hometown in order to counteract any hurdles."

More on this topic:

19 February 2016

Rising business costs to put brake on wage risesWage inflation is likely to fall this year with average pay rises of 1.2% expected during 2016, according to HR body the CIPD.

These are the findings of the CIPD's latest quarterly Labour Market Outlook survey report. It says that median basic pay rises of just 1.2% are to be expected in the 12 months to December 2016, compared with 2% three months ago.

The low pay growth expectations for the year ahead are largely due to an increase in employment costs, it says. There has been an increase in the proportion of employers citing pension auto-enrolment, increases to the National Minimum Wage (NMW) and low inflation as key reasons why they haven't been able to afford to pay their workers a basic pay rise of 2% or above in the past twelve months.

Among those employers that weren't able to increase pay by 2% or more in the 12 months to December 2015, the following reasons were given:

  • 36% of employers cited affordability;
  • 17% of employers said inflation is acting as a brake on pay awards (up from 13% in the past three months);
  • 17% said auto-enrolment pensions have limited pay rises to less than 2% (up from 10%); and
  • 14% of employers cited the increase in the National Minimum Wage (NMW) in October 2015.

However, the survey shows that the softening in pay growth hasn't been accompanied by pessimism about jobs growth. This quarter's net employment balance - which measures the difference between the proportion of employers who expect to increase and those that intend to decrease staff levels - now stands at +21, compared with +28 three months ago. Despite a modest fall, the data suggests employment growth will remain robust in Q1 2016.

Gerwyn Davies, labour market analyst at the CIPD, said: "A significant proportion of employers have already reported increases in employment costs as reasons why they have limited pay rises in the last 12 months to 2% or less - and looking ahead these cost pressures will only increase."

He added: "With inflation expected to remain low during 2016 and labour supply remaining strong, we shouldn't be surprised to see pay expectations staying low. Budgets remain tight so if there are any pay rises to be given, it's likely that employers will target financial rewards towards high-performers and those with in-demand skills that are difficult to replace, rather than the workforce as a whole."

More on this topic:

19 February 2016

Have businesses made up their mind on the EU?Nearly two-thirds of senior business people say that the outcome of the Prime Minister's current renegotiation is unlikely to change how they will vote in an EU referendum.

These findings are the result of a major new survey by the British Chambers of Commerce (BCC). The results show that 60% would vote to remain in the EU, down slightly from 63% when the Chambers last polled members in September 2015, and 30% would vote to leave - up from 27%. But 63% said any renegotiation would not change their view at this stage.

The survey polled 2,000 senior business people. Those representing large firms are significantly more likely to vote to "remain" than those in small and micro-businesses. Not surprisingly, firms' international orientation is a major factor, with opinion varying based on whether and where firms export.

"Our findings suggest that for business people, this is a question of in or out - not renegotiation," said John Longworth, BCC director general.

"Our findings suggest that the renegotiation is having little impact on day-to-day business - or the vote of the BCC's business community, since many made up their minds before knowing the outcome of negotiations, effectively discounting them as irrelevant."

Longworth described the results as a "wake-up call" for both camps. "Neither side can bank on a change to business opinion in the wake of any renegotiation settlement."

Key findings in the survey include:

  • 60% of business leaders would vote to stay in the European Union should the vote take place tomorrow;
  • 30% would vote to leave;
  • 63% said Cameron's renegotiation was "unlikely" to influence their vote;
  • 43% said the EU referendum was "very important" to their business.

If the UK were to leave the EU, 39% of business people polled said they expect this would have a negative impact on their overall growth strategy while 36% said it would have no impact and 17% said it would have a positive impact.

More on this topic:

19 February 2016

Twitter storm in a teacup?

The Twitterati were up in arms last week when a Buzzfeed report suggested that Twitter was going to unveil a new type of feed based on algorithms designed to flag up popular content rather than using a strict timeline. Twitter ceo Jack Dorsey has not denied the rumours and The Verge is reporting that the change could happen any day now. However, it appears that followers will be able to opt out of the new-style feed and go back to the chronological feed if they so wish. Undoubtedly Twitter is confident that users will appreciate the fact that more interesting tweets are getting highlighted.

UK self-employed numbers reach new high

The number of self-employed in the UK has hit a new record high of 4.66 million in the final quarter of 2015 according to figures from the Office for National Statistics (ONS). The number of people identifying as self-employed rose by 154,000 in the three months leading up to December, compared to the same period in 2014. Lorence Nye, economic policy advisor for the Association of Independent Professionals and the Self Employed (IPSE), said: "Working for yourself is a positive choice, with our research showing the vast majority (86%) are very satisfied with the way they work."

Would working less hours mean more gets done?

A poll by SME experts Atom Content Marketing (publishers of the Donut websites) has shone new light onto the perennial issues of work-life balance and productivity. The survey of small business people found that most are working longer hours than ever, with 54% saying they never take their full lunch break and 56% often working late. And yet when asked if they would be more productive working four days instead of five, 37.5% said definitely, 37.5% said maybe and just 25% said no.

New way to avoid nuisance calls

If you work from home, you'll undoubtedly have to deal with occasional nuisance calls, from annoying sales calls to automated messages. Research by Which? has found that 75% of customers get unwanted calls every month. Now BT has announced that later this year it will launch a new service for its retail customers, which promises to divert up to 25 million unwanted calls a week by identifying rogue numbers and adding them to a BT blacklist. Customers will also be able to compile their own personal blacklist by adding individual unwanted numbers, as well as nominating whole categories of calls they want to avoid, such as international calls or withheld numbers.

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