The problems of starting a business

Written by Paul Beasley, director of biz4Biz and managing director of RHG Financial Services.

Business start-ups are booming apparently, despite the bureaucracy and regulation. It makes me wonder how much more successful an economy we could have if the government stopped using us as unpaid civil servants. Just think about what we do on government’s behalf:

  • Tax collectors: PAYE, VAT and Employers National Insurance at a whopping 13.8%, simply a tax on employment
  • Policing: various systems to detect money laundering and illegal immigrants
  • Welfare distribution: Statutory sick pay, maternity and paternity leave
  • State pension providers: Auto Enrolment represents a shift from state to private provision. Many retirees will receive a lower state pension when they retire than expected and no doubt statutory contributions to AE schemes will rise to subsidise the state pension further

Then we have the regulatory burdens which once enacted are embellished further:

  • Health and safety: Normally emanating from Brussels and adopted to the letter and beyond by a naïve British fair play attitude.
  • Employment law: Only in the UK can an employee successfully sue his employer from prison having assaulted a fellow employee. Apparently the employer did not follow the correct dismissal process.
  • Bespoke regulatory bodies: the Financial Conduct Authority is the regulator for my sector and it has just increased fees by 320% this year, with little warning. Most of this is to pay for the misdemeanour’s of others. There will be other industries with similar experiences.

It is difficult enough finding finance, premises are in short supply in many areas, the education system is not producing the quality and type of skills that many businesses need.

Advances in technology continue to reduce employment. The government should not be adding to the problem with policies that either deter employers or lead them to out-source overseas.

The fact that so many new businesses are thriving despite the tax and regulatory environment is testament to the entrepreneurial zeal we have in this country. This comes from within, from us as a people and as individuals. The government should withdraw their tentacles and allow this national asset to flourish and maximise its potential.

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