I can sing a rainbow

The proposed “Enterprise Bill” announced in the Queen’s Speech, is at first glance, more than welcome. However, I couldn’t help but recall that childhood song that mentions all the colours of the rainbow – and more!

The colour alluded to in the proposed bill, is, of course, red. Specifically, that’s red tape. But how often have we heard this? For almost every one of the 30 years I have been advising SMEs, I have called for a simplification of the administrative burden on small and medium businesses. And in almost every Budget in that 30 years, there has been a promise to “cut red tape”. But if we go back to the days when I first studied tax, the legislation (the whole UK tax code) was in just two relatively slim volumes: one for direct taxes, and one for indirect taxes. Now it takes 8 books, printed in tiny font, on wafer thin paper, and several inches thick to contain all of the tax code. Granted, we live in a more complex world, with sophisticated tax planning that needs a framework to support it and to try and prevent abuse. But can red tape really be cut when that legislation has to be applied as equitably as possible?

Taking off my cynical hat, what does the Bill promise? It will include measures to reduce regulation on small businesses in a bid to boost job creation. It will seek to cut red tape for British business by at least £10bn and, for the first time, require independent regulators to contribute to that target. In addition, it proposes to create a new Small Business Conciliation Service, to help settle disputes between small and large businesses, especially over late payment practices. The government also aims to improve the business rates system ahead of the 2017 revaluation, including by modernising the appeals system. And it proposes to introduce a cap on public sector redundancy payments to six figures for the highest earners.

We will see…..