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Business Laws That All Small Businesses Should Know

By July 13, 2016 No Comments
Business Laws That All Small Businesses Should Know

Today, more and more business laws are coming out that affect small businesses in one way or another. Here we take a look at the main ones to be prepared for, to keep disruption to a minimum and ensure you can stay focused on running your small business.

Auto Enrolment

Thousands of small businesses in the UK are now enrolled on this workplace pensions scheme, and if you’re not already aware of what is required of you, now would be the time to educate yourself on auto enrolment and what you need to do in the short, mid and long terms.

As a business you are now legally responsible to help staff save for their retirement for the very first time. In order to ensure a smooth transition and less upheaval the following process should be followed:

  • Set up a workplace pension scheme.
  • Communicate these new pension rules in a written letter to your employees. You can find templates on The Pensions Regulators website.
  • Automatically enrol all of your eligible staff.
  • Register your business with The Pensions Regulator and ensure to keep a record of this.
  • Complete your declaration of compliance with The Pensions Regulator.

Once you’ve begun this process you will then need to facilitate any opt-out requests and arrange refunds. From then on you will need to maintain accurate records, which will need to be constantly reviewed with your employees including any new staff that you take on. If you already utilise an accountant or book-keeper then they will be able to help you with these.
This can seem like an overwhelming amount of paper work and admin, so if you do not have the confidence to do it yourself, it may be cost and time effective to hire the help of an accountant or book-keeper.

Data Protection

If you hold and process information about your clients, employees, or suppliers, you are legally obliged to protect that information. Under the Data Protection Act, you must:

  • Only collect information that you need for a specific purpose.
  • Keep it secure.
  • Ensure it is relevant and up to date.
  • Only hold as much as you need, and only for as long as you need it.
  • Allow the subject of the information to see it on request.

Digital Regulations

It is now legal for employers to read the private online messages of their workforce, as stated by the European Court on Human Rights. However as an employer you will only be legally entitled to check these messages via a company device, and will not be allowed to snoop on personal phones, so it’s important that you make any new changes clear to your employees.

If you are looking to implement this policy then you need to communicate this to staff through their contract of employment, setting clear guidelines on the use of personal devices in the workplace environment, as well as guidelines on the use of company devices.

The National Living Wage

The National Living Wage is the legal minimum an employer must pay per hour so it would be wise to start looking at how you manage your payroll in response to this rise, if you haven’t already. George Osborne confirmed that there will be help for small businesses, meaning a company will be able to employ four people full time on the new National Living Wage and pay no national insurance. Understandably, there has been much confusion between the difference of National Minimum Wage and the National Living Wage. However it can, essentially, be broken down like this:

    • National Minimum Wage – This is the per hour rate for those under the age of 25
    • National Living Wage – This is the per hour rate for those 25 and over

You can find the full details of the NLW regulations in ByteStart’s Guide to the National Living Wage for small businesses.

Small Business, Enterprise And Employment Act

The Small Business, Enterprise and Employment Act is designed to make the United Kingdom a more attractive place to start, finance and grow a business and reduce the barriers that many small businesses face in their drive to innovate, grow and compete.

This Act places considerable requirements on the Government to slash red tape. This is supported by new reporting and transparency requirements, and better analysis of regulation and secondary legislation to avoid unnecessary burdens on business. It also supports SMEs seeking to expand overseas by improving access to export financing and redefining how it is used.

There’s also good news for us small business lenders as the Act allows for improved credit data sharing, making it easier to process funding quicker. There were also significant changes to public sector procurement policies, to ensure that SMEs get better access to procurement markets, through streamlining and efficiency procedures which are consistent across the public sector. You can read more about the Act here.

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More businesses than ever before are looking to Boost Capital for their business financing needs. To learn more about how our UK small business loans work or to explore the business financing options that are available to you, contact us today!
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