Tag Archive | "growth"

FPB calls for national day to recognise UK entrepreneurs


Freelancers may be interested to learn that The Business Woman’s Network and the FPB are supporting the call for a national day to celebrate UK micro business owners.

The online business knowledge website wanobe.com launched the idea of a day to celebrate the UK entrepreneurs who run the 4.5 million small firms in Britain.

David Noble, the managing director of Wanobe.com said the men and women who run the UK’s small businesses represent dynamism for the battered economy at a time of high unemployment and are the nation’s unsung heroes.

95% of all companies in the UK are micro enterprises and between them they employ 33% of the workforce. Noble says it’s now time to acknowledge the vital role entrepreneurs play in driving the economy.

The FPB has already launched its own initiative called ‘Get Britain Trading’. Phil McCabe, the PR manager for the Forum, said although micro-business entrepreneurs are spearheading the fight to drive the British economy, a lot of people have no idea what it takes to run a business. Having a dedicated day to celebrate the contributions and efforts of small business entrepreneurs would be a wonderful way to highlight how commitment, creativity and bright ideas generate new jobs and help stimulate economic growth.

The Business Woman’s Network’s Mandie Holgate, explained that there are now more than 950,000 self employed females in the UK and around 15% of firms are majority owned by women. They should be extremely proud of the contribution they make to both society and the economy.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Henrik Moltke – New Media Days Award recipient 2010 by New Media Days

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Should contractor accountants be prepared for a decade of low salary increases?


Employees, including contractor accountants, should be prepared to see their salaries increase at a much slower rate over the next decade than they did in the noughties, according to the CIPD’s chief economic adviser, John Philpott.

ONS data shows that the average annual earnings for a full-time employee in April last year was £25,879. This represented a 37% increase on 2000’s figure, or if you take CPI inflation into account, a real terms increase of 16%.

Mr Philpott explained that we saw strong economic growth throughout much of the 2000s. Inflation and unemployment were low and this enabled earnings to improve. However, those conditions are unlikely to reappear until at least 2015 and in the meantime employees could feel frustrated by their pay packets.

Philpott predicts that the first half of this decade will see the tougher conditions we have experienced since the onset of the credit crisis continue to bite. Rising unemployment puts downward pressure on pay settlements and average earnings are unlikely to rise above about 2% a year.

If this situation persisted until 2020, average salaries would rise to just £30,000 and inflation would cancel out the increase. But Philpott said that is a worst case scenario and he hopes to see growth picking up during the second half of the decade. If that happens, average earnings growth for the decade should be around 3%, meaning a median salary of £34,000 in 2020.

Earnings capacity will be influenced by a number of factors, including skills and experience, and employers will pay a premium for people with skills that are in high demand.

Meanwhile, the Department for Business, Innovation and Skills has launched a consultation into proposals to make it easier for investors to understand company reporting and to encourage more detailed data to be published about the pay rates of executives.

The consultation will also consider whether companies should follow the guidance of the Women on Boards report and publish data showing how many women are board members.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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Are any contractor accountants getting pay rises?


26% of employers do not intend to increase salaries this year as sluggish private sector growth and public sector austerity measures impact companies’ capacity to reward their employees.

The latest annual Reward Survey from the CIPD shows that while 99% of employers will not be cutting pay this year, only 65% will actually be increasing it. A further 9% have delayed their review of salaries.

60% of respondents said market rates were the most important factor when it came to determining salary levels and 61% link pay to individual performance, at least in part.

67% of organisations operate reward schemes that are performance-related and the most common options are pay rises based on merit and individual bonuses. 29% also operate non-monetary awards for individual clerical and manual members of staff.

The CIPD’s performance and reward adviser, Charles Cotton, said it’s not surprising that some companies are not able to award salary increases this year. The survey results also show that employers are focusing more on linking pay and bonuses to performance.

Meanwhile, private sector pay edged up by 3% in the first quarter of this year. Inflation is hovering around 4.5% so the rise doesn’t fully compensate but it is an increase which is something public sector workers currently yearn for.

The increase in private sector pay has been led by the automotive and utilities sectors. 3% is still well below the CPI rate and when you factor in the freeze in public sector pay, the average comes out at 2.5%.

Experts are now predicting that the Bank of England will hold the base rate at its historic low of 0.5% until at least November. With inflation rising faster than wages, take-home pay will continue to shrink for a while yet.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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Who are the enemies of contractor accountants?


David Cameron has attacked the people he considers to be the enemies of enterprise that are threatening to hold back British businesses.

Speaking at the Conservative spring conference in Cardiff, the PM repeated his commitment to the promotion of economic growth. Cameron said that as well as having a positive social impact, new enterprises are good for the economy. He did however admit that we have our work cut out to encourage people to form a limited company.

For more than 10 years, the enemies of enterprise have taxed, regulated, smothered, crushed and generally got in the way, he said.

George Osborne’s budget later this month will lay out specific measures to help business start-ups. These could include the removal of bureaucracy and the easing of regulations.

Meanwhile, existing companies are confused about the requirements of the new senior accounting officer legislation adding compliance costs to their existing financial burden. However, Deloitte says most are in a good position to comply.

According to Deloitte’s research, 11% of organisations have complete confidence in their compliance, although 69% expect to file an unqualified certificate. The areas that are causing most concern are VAT, PAYE, corporation tax and excise duties.

The new rules mean that senior financial officers now have to certify annually that their company systems are fit for tax reporting purposes. The legislation only affects companies with a turnover in excess of £200 million.

HMRC had assured companies that the sign-off would not lead to increased costs, 50% of respondents claimed the costs had been significant. 13% did admit that the increased cost of compliance has been set off in part by the savings they discovered during the review process.

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Business failures mean less demand for accountants for contractors


More businesses closed than started up in 2009, according to recently released statistics from the ONS.

Last year about 279,000 businesses closed their doors, the highest number since 2000 when the business demographic survey started.

As far as business births were concerned, the highest rate was in business administration and support services at 13.9%. 48,000 new businesses were created in professional, scientific and technical, representing a birth rate of 12.5%.

Over 44,000 construction companies died in 2009, whilst 42,000 professional, scientific and technical faded into oblivion. Business administration and support services had the highest death rate of all at 14.8%.

London had the highest birth and death rate, recording 12.6% of all new start-ups and 13.7% of business closures. Northern Ireland, on the other hand, recorded the lowest rate in both categories with 6.6% of new businesses and 9.2% of business deaths.

The CBI has now predicted that business growth next year will be slower than it had first thought. The employers group now predicts growth of only 0.2% in quarter one next year with a total growth for 2011 of 2.0%.

The first few months next year are expected to be especially sluggish due to the VAT rate hike, according to the CBI.

Ian McCafferty, the chief economic adviser to the CBI, said that economic growth had surpassed expectations in 2010 but this is not expected to continue as government austerity measures and VAT rises enter the economic equation.

The CBI has also predicted that economic growth will increase by 2.4% in 2012.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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2011 looks encouraging for most industry sectors


Contractor accountants with clients operating in or relying on a number of UK sectors will be pleased to hear of some positive growth.

For example, new research from the EEF shows that the UK’s manufacturing sector reported strong output and good order balances in quarter three.

Manufacturers have already started hiring new staff and making new investments which will undoubtedly come as welcome news for contractors. Ms Lee Hopley, the chief economist at EEF, said that the manufacturing industry was ending 2010 on a high and this will provide the sector with a strong footing to begin the New Year. EEF also predicts that manufacturing and engineering will outperform other contributors to the UK economy in 2011.

It’s not only the UK that has witnessed this welcome boost in manufacturing either. Markit Economics recently reported that last month, the manufacturing sector across Europe increased at its fastest rate for 4 months.

But manufacturing isn’t the only sector planning to expand next year. Research by PwC shows that 28% of firms in the UK intend to increase recruitment in 2011. In addition to manufacturing, the technology and services industries should see vigorous recruitment, the study showed.

The recent Growth Review from the government also contained encouraging news for a lot of UK contractors.

David Frost, from the British Chamber of Commerce, said that enterprises will be reassured now that the focus is to return to balanced, sustainable growth. The review talks about creating a framework for growth and also acknowledges the vital contribution made by SMEs. However, it remains to be seen whether the coalition can bring down the barriers that have been preventing firms from thriving.

One piece of not so positive news regarding the service sector has come from the CBI. Although professional and business services have remained steady over the past few months, consumer services have tumbled. The CBI cited reduced consumer discretionary spending as a contributory factor along with rising costs and falling prices.

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Image: Growing by Simon Peckham

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Fears of double dip recession eased


Fears of a double-dip recession have been alleviated, at least temporarily, by a report released at the end of last week that showed that GDP rose 0.2% in the first quarter of 2010.

Self employed contractors and limited companies in the financial sector should definitely be encouraged by this news as the rise was mainly due to a growth in financial industries and business services of 0.6%.

Other sectors that contributed to the growth were communication, government, storage and transport.

Some industries however did not show such positive results, with construction, distribution, hotels and restaurants all showing a decrease in output

The treasury spokesman for the Lib Dems, Vince Cable, was not particularly optimistic at the news. He said that there is still a real danger of the country sinking back into recession as the marginal growth shows there are very few visible signs of the promised recovery.

He added that whilst the banks continue to starve businesses of credit and people struggle to get out of debt, the recovery is likely to remain in a fragile state.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: just take one dip and end it by peyri

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