VAT rise means tough start to 2011 for Entrepreneurs, and more news…

A round-up of stories that took our attention over the New Year…

Entrepreneurs predict VAT increase misery

Business Zone reports almost three quarters of entrepreneurs believe the VAT rise will have a detrimental impact on their small business. The Federation of Small Businesses (FSB) surveyed 1,600 small firms and found that 70% believed the tax increase from 17.5% to 20% will cause a negative effect on company operations. The research shows another 45% predicted a fall in turnover, while 36% expected a loss of customers as a result of having to raise prices. 52% admitted they would be increasing the cost of products and services.

New Enterprise Allowance expanded, set for January North West launch

Prime Minister David Cameron announced today that the New Enterprise Allowance scheme will be expanded over the next two years to assist up to 40,000 new businesses, reports Inside the M60. Cameron said the scheme would help make the coming years “some of the most dynamic and entrepreneurial in our history”. Under the scheme, people who have been claiming unemployment benefits for more than six months will be offered up to £2,000 of financial support, including a start-up loan and a weekly allowance, as well as advice from a mentor with experience in business. The programme will be launched later this month in Merseyside and rolled out nationwide by the autumn.

Business Link overhaul continues

Plans to shift Business Link into a centralised online operation are continuing, reports the Guardian. New features of the website include a business start-up hub, including access to online company registration, notification of public procurement opportunities through a “contracts finder”, a business tax dashboard to help businesses set up and track their tax position and a network of at least 40,000 experienced business mentors offering practical advice to existing businesses and people who want to start a business. Regional offices of the service are starting to be closed, with over 140 staff at Business Link West Midlands having been put on notice of redundancy before Christmas.

Small Firms Failing on Pensions

The BBC is reporting that two-thirds of small firms do not offer their employees a pension, while many that do are not providing sufficient contributions. Research by the Association of Consulting Actuaries (ACA) said most defined contribution pension schemes are failing to keep pace with the contributions necessary to cover longer life expectancy. All companies will have to offer staff a pension by 2016, although the ACA said small firms expect 35% of employees to opt out of the schemes. The group said defined contribution pension schemes run by small companies are attracting combined employer and employee contributions of less than 8% of earnings.

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Written by Alistair Beech on January 6, 2011 and filed in Entrepreneurs, Freelancers, Money, News , , , , , ,


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