Does our government understand the true cost of new legislation to small businesses? In the last four years I have seen a whole raft of legislation which, although arising from good intentions, has undermined the profitability of our wholesale trade channel without providing us with any clear means of recovering these taxes (losses). They have had to be accepted as a direct cost.
I would like to challenge the government's Small Business Service to explain the role it is supposed to be playing in protecting businesses because I am confused when I compare it to the SBS vision, which is: "By 2005, the UK should be the best place in the world to set up and run a business."
And I am also perplexed when I read the SBS mission statement: "To build an enterprise society in which all small businesses thrive and achieve their potential."
I am pleased to be able to represent the delivered wholesaler both as managing director of the Sugro Group of Companies and also as a director of the Wholesale Confectionery & Tobacco Alliance trade body (WCTA). This brings me into contact with all sorts of White Paper reviews of legislation and just recently I have also represented the WCTA on the DEFRA review of waste packaging legislation.
This may all sound very boring to the reader and on many occasions I can wholeheartedly agree. Tragically, however, some of this legislation does carry a price for our businesses, whether as an employee or an employer.
First there was the introduction of the Packaging Waste Regulations which enforced a percentage of recycling which has increased over the years. A delivered wholesaler is effectively a distributor on behalf of the manufacturer. He does not break down cases and therefore the goods that arrive are despatched by the wholesaler in that same condition. The wholesaler has no opportunity to recycle any of the secondary packaging and therefore has no means of recovering the newly imposed costs, as others in the supply chain do.
Another area of concern is the loss of cigarette forestalling, which was a profitable stock revaluation tool. However, its abuse has led to a tightening of practices by Customs & Excise which has had the effect of minimalising if not annihilating any opportunity to generate forestalling profits.
We have asked Customs & Excise to review its position after further investigations within the supply chain into whether stock imbalances could identify where the abuse took place. But it appears it has merely reinforced the rules on the basis of one man's profit being interpreted by the government as tax avoidance.
We have also seen the introduction of a Climate Change Levy, which has raised energy bills for small businesses by 15%, together with all the additional surcharges per kilowatt, with coal, gas and electricity being automatically added.
There are opportunities to reduce utility bills through negotiation but this has not always effected the reductions required to create major benefit, primarily because of the level of usage by a small business and its opportunity to leverage benefits as a result.
While the national minimum wage was a responsible thing to introduce, it was abused politically and is accelerating with more increases due in the future. This undermines the opportunity to employ more staff and pushes up operational costs.
And then we have parental support, disability rights, national insurance, stakeholder pensions and the Congestion Charge. The latter is gathering momentum within major cities but, no doubt spotting an opportunity for taxable income, the government is indicating it wishes to impose charges for the use of major trunk roads.
The government must recognise the true cost of all this legislation to small businesses which do not have the flexibility to raise additional revenue to cover all the costs, resulting in a direct margin reduction.
{{COMMENT - GUEST }}
I would like to challenge the government's Small Business Service to explain the role it is supposed to be playing in protecting businesses because I am confused when I compare it to the SBS vision, which is: "By 2005, the UK should be the best place in the world to set up and run a business."
And I am also perplexed when I read the SBS mission statement: "To build an enterprise society in which all small businesses thrive and achieve their potential."
I am pleased to be able to represent the delivered wholesaler both as managing director of the Sugro Group of Companies and also as a director of the Wholesale Confectionery & Tobacco Alliance trade body (WCTA). This brings me into contact with all sorts of White Paper reviews of legislation and just recently I have also represented the WCTA on the DEFRA review of waste packaging legislation.
This may all sound very boring to the reader and on many occasions I can wholeheartedly agree. Tragically, however, some of this legislation does carry a price for our businesses, whether as an employee or an employer.
First there was the introduction of the Packaging Waste Regulations which enforced a percentage of recycling which has increased over the years. A delivered wholesaler is effectively a distributor on behalf of the manufacturer. He does not break down cases and therefore the goods that arrive are despatched by the wholesaler in that same condition. The wholesaler has no opportunity to recycle any of the secondary packaging and therefore has no means of recovering the newly imposed costs, as others in the supply chain do.
Another area of concern is the loss of cigarette forestalling, which was a profitable stock revaluation tool. However, its abuse has led to a tightening of practices by Customs & Excise which has had the effect of minimalising if not annihilating any opportunity to generate forestalling profits.
We have asked Customs & Excise to review its position after further investigations within the supply chain into whether stock imbalances could identify where the abuse took place. But it appears it has merely reinforced the rules on the basis of one man's profit being interpreted by the government as tax avoidance.
We have also seen the introduction of a Climate Change Levy, which has raised energy bills for small businesses by 15%, together with all the additional surcharges per kilowatt, with coal, gas and electricity being automatically added.
There are opportunities to reduce utility bills through negotiation but this has not always effected the reductions required to create major benefit, primarily because of the level of usage by a small business and its opportunity to leverage benefits as a result.
While the national minimum wage was a responsible thing to introduce, it was abused politically and is accelerating with more increases due in the future. This undermines the opportunity to employ more staff and pushes up operational costs.
And then we have parental support, disability rights, national insurance, stakeholder pensions and the Congestion Charge. The latter is gathering momentum within major cities but, no doubt spotting an opportunity for taxable income, the government is indicating it wishes to impose charges for the use of major trunk roads.
The government must recognise the true cost of all this legislation to small businesses which do not have the flexibility to raise additional revenue to cover all the costs, resulting in a direct margin reduction.
{{COMMENT - GUEST }}
No comments yet