Friday 30th January

Tax red tape costs £10 billion a year

Small businesses are hit hardest by a company tax system that costs companies around £10 million a year in administration costs,...

Small businesses are hit hardest by a company tax system that costs companies around £10 million a year in administration costs, according to a tax group.

As self-assessment deadline day looms large, accountancy body the AAT researched views from 500 businesses and calculated that SMEs will spend around £9.9 billion this year on compliance.

That compares with the estimated £100 million large firms pay to keep their books in order.

On average, the UK’s 2.25 SMEs (not including sole traders) incur £4,376, just under half the amount paid by large businesses.

While the headline cost is lower in small businesses, the AAT points out that the impact is proportionally greater because they have fewer resources to call upon.

Mark Farrar, AAT chief executive, said: “It is a strong indicator of just how hard dealing with tax can be when 80% of our members, experts at navigating through the intricacies of tax compliance, state that the UK tax system is too complicated.

“Making the tax system simpler could help to lift this extraordinary weight, diminishing the costs that SMEs face. This would give SMEs the space they need to invest in growing their business and hiring more staff - a vital component for the UK’s economic recovery.”

Seven in 10 SMEs answering the study said dealing with tax issues is too complicated, while eight in 10 accountants said the same.

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‘Robust growth’ in retail sales after Christmas rush

Retail sales are growing strongly in January despite a slight cooling in activity after the Black Friday and Christmas rushes, according to research by the CBI....

Retail sales are growing strongly in January despite a slight cooling in activity after the Black Friday and Christmas rushes, according to research by the CBI.

A survey of 127 major retailers by the group revealed sales up year-on-year at a slightly slower rate than the 12 months to December but still “healthy”, said the CBI.

Sales volumes were above average for the time of year, while certain product categories did particularly well such as clothing which had its best month since February 2013.

Grocers, furniture and carpet stores, jewellery and second-hand goods also did swift business this month, while online sales continued their relentless climb.

Rain Newton-Smith, CBI director of economics, said it was good news generally, although increased competition and price cuts were putting pressure on sales margins.

“After the sales bonanza of Black Friday cooled down, retailers saw solid footfall through the doors over the Christmas trading period, leading to further robust growth in sales in the New Year.

“However, under the spotlight of strong competition, some retailers are feeling the heat on their margins.

“Falling oil prices and low inflation mean consumers have a bit more money in their pockets. We expect to see this translate into strong sales growth in the months ahead.”

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Wednesday 28th January

Small firms attack Diageo supply deals

Small business lobby the Forum of Private Business (FPB) has accused drinks manufacturer Diageo of a “cynical exercise” in extending its payment terms and introducing supply chain finance to help suppliers cope....

Small business lobby the Forum of Private Business (FPB) has accused drinks manufacturer Diageo of a “cynical exercise” in extending its payment terms and introducing supply chain finance to help suppliers cope.

FPB said Diageo extended its terms from 30 days to 60 days in 2009 and recently extended them by another 30 days, meaning companies must wait three months for payment.

The group says the move is out of step with the government’s Prompt Payment Code, which sets parameters on what client companies can and can’t do.

It says companies must give clear guidance on payment terms to suppliers and must not change payment terms retrospectively.

“Diageo now appears to have broken its commitment as a signatory of the Prompt Payment Code,” said the FPB in a statement.

“This episode further highlights the need for urgent action in order to tighten the existing rules around the Code, the Forum believes.”

FPB chief executive Phil Orford said: “We are very concerned, but sadly unsurprised, to learn that Diageo is yet again extending its payment terms, a practice that is hugely damaging for small businesses.

“We are consulting with the Institute of Credit Management and Department of Business Innovation and Skills to challenge Diageo’s status as a signatory to the Prompt Payment Code and will call for their removal.

“The practice of big businesses using a supply chain finance scheme in order to extend payment terms and protect their own cash flow is a worrying trend that is spreading across sectors and industries.

He added: “At a time when the economic outlook remains uncertain it is fundamentally unfair that small businesses are being used as a line of credit for larger organisations and propping up big business.”

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Scotch whisky contributes £5bn to economy

New drinks industry research shows that Scotch whisky contributes around £5 billion to the UK economy, supporting more than 40,000 jobs....

New drinks industry research shows that Scotch whisky contributes around £5 billion to the UK economy, supporting more than 40,000 jobs.

In Scotland, whiskey is the second biggest export product after North Sea oil. The Scotch Whisky Association (SWA), who commissioned the report, said it represents a quarter of all food and drink exports.

Its value to the UK economy has soared 21% in seven years and now contributes more than major industries such as iron and steel and computing.

The report revealed that every job in whisky industry supports 2.7 posts in related sectors, while every £1 million generated creates a further £520,000 through related services such as logistics, design and packaging.

SWA chief executive David Frost said: "This new report shows just how significant the Scotch whisky industry is to the wider UK economy, adding £5bn of value, supporting over 40,000 jobs, and contributing £4bn to Britain's trade performance.

"Scotch whisky must be recognised as a cultural asset that boosts growth and jobs, supports communities and combines the best of the traditional and the modern.

"Given the scale and impact of the Scotch whisky industry, we believe the government should show its support. One way of doing so, in the short term, would be for the chancellor to cut excise duty by 2% in the March Budget."

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Monday 26th January

Spontaneous purchases on the rise

Improving employment figures are starting to register in shopping trends, with more spontaneous purchases and consumers in a more positive frame of mind....

Improving employment figures are starting to register in shopping trends, with more spontaneous purchases and consumers in a positive frame of mind.

Research by accountancy firm Deloitte shows discretionary spending is at a three-year high, with more people registering pay rises and fewer suffering loss or reduction of income.

Ben Perkins, head of consumer business research, said: “Lower inflation and higher wages are having a pronounced effect on consumer spending behaviours.

“Categories such as hotels and restaurants or consumer technology have really benefited from consumers feeling less of a squeeze on their disposable income.

“In comparison, net spending on utilities and groceries is growing more slowly than consumer spending overall, a reflection of falling fuel prices at the pump and the grocery sector’s intense price competitions.”

Consumer finances have received a boost from the lowest rate of inflation in 14 years, with the prices of food, energy and petrol all tumbling.

It means people are spending less on essentials and have more to put aside for discretionary purchases.

It is good news for retailers after a mixed picture in 2014 and a competitive Christmas period.

But Deloitte sounded a note of caution, not least because of uncertainties surrounding growth in the Eurozone and the May general election in the UK.

Ian Stewart, chief economist, said: “Although consumers have turned more positive on prospects for incomes in the last year, continued uncertainties seem to be affecting their wider perceptions of their welfare.

“For the UK consumer the sort of transient deflation caused by lower oil and other commodity prices will be a significant positive in 2015. Growth in real wages is set to accelerate further.”

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London firms set out priorities for May election

Businesses in London are calling for a solution to the housing shortage, investment in transport and more money for skills in their demands to ministers ahead of May’s general election....

Businesses in London are calling for a solution to the housing shortage, investment in transport and more money for skills in their demands to ministers ahead of May’s general election.

The pre-election priorities were published today by the London Chambers of Commerce and Industry (LCCI).

They highlight the increasing strain on the UK capital with population outstripping the capabilities of basic services including transport and education.

It also called for more powers for City Hall and the mayor, while demanded that more of the tax generated by London firms is spent within the city.

According to the economics think tank CEBR, London contributed £34 billion to public coffers last year, yet only 7% was retained.

That figure compares with 50% in New York and 70% in Tokyo.

Colin Stanbridge, chief executive of the LCCI, said: "Although London's business leaders are confident about the capital's improving prospects, the next government must not overlook the importance of London as a key contributor to the success of UK PLC and act to address the issues faced by the capital's businesses.

“To maintain and build on the economic prosperity of the capital, we call on the next government to listen to the intelligence contained in this manifesto and act on the recommendations set out."

The LCCI also called for improvements to Cyber resilience in London. Research of 500 businesses shows that the high cost of protections was a major barrier against stronger security measures.

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Friday 23rd January

Lloyds offers cash grants to social entrepreneurs

Lloyds bank is looking to grant 300 aspiring entrepreneurs up to £19,000 each this year under its School for Social Entrepreneurs programme....

Lloyds bank is looking to grant 300 aspiring entrepreneurs up to £19,000 each this year under its School for Social Entrepreneurs programme.

In addition to the grant the new students on the programme will receive a fully-funded year-long training programme at the school and will work with a dedicated business mentor provided by the bank for 12 months to help them get their business off the ground.

Finance for the programme is being provided by Lloyds and the Big Lottery Fund. It was launched in 2012 and has trained 748 entrepreneurs so far.

The ambition is to support around 1,300 social entrepreneurs by 2017.

Taster sessions will be held in England and Scotland during February and March. They will showcase what’s on offer and how entrepreneurs are supported.

The locations are:

• Aldershot

• Basingstoke

• Birmingham

• Bristol

• Cornwall

• Dundee

• Durham

• Edinburgh

• Gateshead

• Glasgow

• Leeds

• Liverpool

• London

• Manchester

• Middlesbrough

• Plymouth

• Southampton

• Stirling

• Sunderland

Graham Lindsay at Lloyds said: “I have seen first-hand the positive impact that social entrepreneurs have in our society, and know of the immense benefit in nurturing their commitment to making a social impact through entrepreneurship.

“Our partnership with the School for Social Entrepreneurs sits right at the heart of our business strategy to help Britain prosper and we are eager to hear the new ideas to inspire social change that will come from this year’s recruits.”

Alastair Wilson, CEO of the School for Social Entrepreneurs, added: “Working in partnership with Lloyds Bank has enabled us to support hundreds of the most inspiring social enterprises in the UK.

“This year we’re thrilled to be supporting even more individuals with a desire to impact social change and look forward to seeing how their enterprises develop and grow.”

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Thursday 22nd January

Entrepreneurial talent ‘undervalued’ in the workplace

A new poll reveals that businesses are undervaluing the entrepreneurial instincts of their employees and could be losing valuable talent as a result....

A new poll reveals that businesses are undervaluing the entrepreneurial instincts of their employees and could be losing valuable talent as a result.

Research involving 1,000 professionals by accountancy group EY shows that just 48% think they can achieve career goals with their current employer.

Less than three in 10 respondents from large organisations thought their employer had an entrepreneurial and innovative culture.

Unsurprisingly, perhaps, just under 70% of 25-to-34 year old executives said they aspired to set up their own business.

Steve Wilkinson, UK & Ireland managing partner, markets at EY, said: “An entrepreneurial mind-set is often associated with small start-up businesses.

“Whereas in reality, all organisations, regardless of size and scale, need people who can innovate, create and challenge the status quo.

“That’s why the best businesses focus on building diverse teams to ensure they are drawing on widest spectrum to views,” he added.

In other findings from the research, just 52% of millennials (younger employees) said their skills were being fully utilised by their boss.

Meanwhile, 82% of the respondents said they had ideas that could create new revenue opportunities for their employer, with just 54% being able to implement these ideas.

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Jewellery Street nets £465,000 from Envestors

UK-based jewellery marketplace Jewellery Street has raised £465,000 in venture funding through the Envestors group of investors....

UK-based jewellery marketplace Jewellery Street has raised £465,000 in venture funding through the Envestors group of investors.

The business was set up in 2012 to “give a fairer deal for designers”, with 12,500 products and 250 designers selling through its website (see link below).

For designers, the website offers secure payment processing, marketing and messaging. They receive 75% of their product’s retail price.

It was set up by former Saatchi & Saatchi executive, Rob Passmore, to serve the estimated £4.8 billion UK jewellery market.

“Envestors members immediately saw the opportunity of applying a successful distribution channel to a high-margin sector lacking a dedicated jewellery marketplace,” said Passmore.

Polygon Group, an investment business based in Guernsey, was lead investor in the round, while Envestors raised £350,000 of the total.

Nick Taylor, co-founder of Envestors, said: “We were able to identify and mobilise investment from a small group of experienced investors who will also be represented on the board to guide the company’s continued success.”

Created in 2004, Envestors has raised more than £80 million and has a network of more than 2,000 business angels.

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Wednesday 21st January

Plus-size fashion site scoops €25m investment

Navabi, a British retail website specialising in women’s premium plus-size fashion, has received €25 million in funding from a group led by Bauer Ventures....

Navabi, a British retail website specialising in women’s premium plus-size fashion, has received €25 million in funding from a group led by Bauer Ventures.

The funding round also included previous investors Index Ventures, Seventure Partners, DuMont Ventures and Klaus Wecken.

The package is composed of cash and an advertising budget with Bauer Media, a magazine and website publishing business, giving Navabi access to Bauer’s 1,000 media titles including Grazia in the UK.

Research from Mintel shows more than 50% of women wear plus-size clothing and sales are growing faster than in traditional clothes shops.

Co-founder Zahir Dehnadi said: “The premium plus size market is the biggest untapped ecommerce sector and has the fastest growth rates in fashion. We are the pioneers and leaders in this market.

“We have grown rapidly over the past six years and have built an insanely passionate company. This latest fund will enable us to continue our mission of providing plus size women with the quality fashion they desire.

“The deal with Bauer Media will place premium plus size fashion firmly in the mainstream media.”

Thomas Preuß at of Bauer Venture Partners added: “Navabi is transforming ecommerce and fashion for so many women.

“This investment, for us, represents a firm belief in not only Navabi’s robust business model but also the company’s aim of providing plus size women with premium clothing apparel.”

The UK market for plus-size clothing is expected to swell to nearly £6 billion in 2015, up from £3.8 billion in 2008.

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