We round-up April’s small business news from the living wage to late payments…
Business news – The Living Wage, Brexit and banks
This month saw one of the biggest shake-ups for small businesses in years – the introduction of the new National Living Wage.
From the 1st of the month, millions of workers received a pay rise to £7.20 per hour for adults. And the Government won’t stop there, hoping to increase the rate to £9 an hour by 2020. This would affect around nine million workers. The new rise is estimated to hit a quarter of workers outside the capital and one in seven within London.
And while businesses across the country will feel its effects, one MP says companies that cut staff benefits in order to pay the new wage will be pressured to “fulfil their moral obligations”.
Conservative frontbencher Nick Boles says there’s no excuse for larger firms seeking to “evade” the impact of the new minimum wage for workers over the age of 25. He argues that support in the form of cuts to corporation tax and business rates will help them cope. Although he cautions against criticism of small firms that don’t preserve all benefits immediately, given the alternative may result in workers being fired.
The other big item on the agenda this month was Brexit. With the vote on whether to leave Europe moving closer, everyone is trying to work out the effects of an exit.
The International Monetary Fund downgraded its forecast for UK economic growth over fears of disruption if Britain votes to leave the European Union on June 23.
In its World Economic Outlook, it warns Brexit could inflict “severe regional and global damage” by disrupting trade relations. Negotiations over post-exit arrangements would probably be “protracted”, leading to an extended period of uncertainty and market volatility.
Meanwhile, Downing Street welcomed new European Commission proposals to move towards a single market in digital services, including the creation of a “European cloud” that will provide an environment for 70 million science and technology professionals to store and share data.
The plans hope to help European industry, small businesses and public authorities make the most of new technologies by speeding up the development of common standards in areas like 5G networks and cybersecurity.
Finally, HSBC launched a £450m fund to support smaller businesses in Scotland. The fund is the largest support package the bank has announced for small and medium-sized enterprises in Scotland, up £50 million on last year.
It has been launched to meet growing SME demand across the country and is part of a broader package for smaller firms aimed at making banking cheaper and simpler.
Business Trends – Late payments, online safety and sexual harassment
Once again, late payments are making the news. A new study has found that smaller UK manufacturers are waiting almost twice as long as their larger competitors for invoices to be paid.
The study by the Asset Based Finance Association found SMEs wait an average of 67 days to be paid, compared with 38 for larger firms. The difference has increased over the past year as large manufacturers enjoyed a fall in waiting time, says the report.
The Atradius Payment Practices Barometer survey for Western Europe found that 90% of firms had invoices paid late by their B2B customers over the past year. This resulted in an average of 40% of the total value of B2B receivables being defaulted on.
Respondents in the UK were the hardest hit by late payment from export customers – 46.4% of the total value of British export credit sales were reported to have been paid late by B2B customers, compared to a 38.3% average for Western Europe.
Data security is still a big issue among small firms. Nearly two thirds of UK adults rely on ‘auto-fill’ and a third login automatically and store their bank card details to shopping sites. This makes them vulnerable to substantial financial losses, according to anti-malware and mobile security company BullGuard. With nearly half of Brits primarily accessing these sites on their phone, the loss of their handset could prove disastrous for small firms.
Finally, sexual discrimination is still rife in the workplace, but a new guide hopes to help those suffering from it. It follows an increase in calls about the problem to a helpline run by conciliation service Acas. It has dealt with 7,175 calls over the past year, a 14% increase on the previous year.
Sir Brendan Barber, who chairs Acas, says nine out of 10 calls came from employees and the overwhelming majority of these callers were women.
The new free guide aims to help employers, small businesses and managers understand the basics around equality law, the different types of sex discrimination and to raise awareness of how positive action can apply to certain jobs.