News in brief: CMA, online reviews, late payments, red tape

News in brief
News in brief

CMA cracks down on fake online reviews

The Competition and Markets Authority’s (CMA) investigation into Total SEO and Marketing Ltd (Total SEO), a search engine optimisation (SEO) and online marketing company, found that between 2014 and 2015 it had written over 800 fake positive reviews for 86 small businesses that were published across 26 different websites which contain customer reviews.

Total SEO has co-operated with the CMA’s consumer law investigation. The company, and its directors, have undertaken to the CMA that they:

  • have ceased the practice of writing fake reviews for their clients; and
  • will take steps to remove the fake reviews already posted online.

In addition to this action, the CMA has written to Total SEO’s clients to warn them that third parties writing fake reviews on their behalf might lead to them breaking the law themselves. The small businesses concerned include car dealers, mechanics, landscape gardeners and other tradespeople.

The CMA has also produced a written brief explanation for businesses summarising how to comply with consumer protection law in relation to online reviews.

SME late payments made through human error

Only 17% of SMEs always pay their suppliers on time. Delays in the processing of supplier invoices are a major factor, with around 44% of businesses having to delay the production of their monthly management accounts due to slow processing of supplier invoices.

This is according a study carried out by independent research house Red Brick which also revealed:

  • Over half (57%) of businesses with £50m+ turnover often make duplicate payments to their supplier network
  • Very few (only 17%) of finance professionals are completely confident that their Purchase Order Processing and Accounts Payable systems are robust enough to deal with fraud.

A cynical view would suggest these inefficiencies are all in favour of keeping cash in the business, however this may be softened by the finding that 61% of respondents occasionally made duplicate payments and of these approximately one third made them frequently.

SMEs need strong leaders to grow

A lack of leadership and management skills is hampering the growth potential of small businesses and acting as a brake on productivity.

This is according to a new report published by the Federation of Small Businesses (FSB) which shows how policymakers, small businesses and partners in the private sector can join forces to tackle the UK’s leadership and management skills deficit.

The report found that while three fifths of small business owners (59%) say they update their business knowledge and skills at least once a year, specific management training is often lacking.

Only a quarter of small firms questioned (25%) had undertaken management training in the last 12 months. One in four (26%) had never undergone any form of management training at all. FSB also found few smaller businesses seek external management training for staff, with just a fifth (19%) offering such training to their employees.

CBI welcomes new measures to cut red tape

The government has announced new measures to help cut a further £10bn of red tape, including updating the One-in Two-out policy to One-in Three-out.

The One-in Two-out policy was introduced under the coalition and ensures that for every new piece of regulation introduced that costs money, twice that cost must be cut elsewhere.

Responding to these announcements, Confederation of British Industry acting director of competitive markets Tom Thackray said: “Cutting unnecessary red tape will give firms bursting with potential – especially small and medium sized ones – the space to grow and thrive.

“Businesses welcome moves to drive down unnecessary regulation and tackle it sector-by-sector. The government must ensure that as many policies as possible are covered by the £10 billion target, as significant exemptions risk undermining the credibility and impact of the wider deregulatory agenda.”

FSB calls for bolder tax simplification measures

The Office of Tax Simplification (OTS) has unveiled a package of recommendations aimed at making the tax system simpler and easier to use for small companies.

Federation of Small Businesses policy director Mike Cherry has said that the changes suggested in the review are important, but must be bolder.

“Our members have told us there is a pressing need to simplify the tax system and reduce administrative burdens.

“Going forward, we urge the Government and the OTS to be equally bold in their approach to tax reform. As the OTS report rightly recognises, the small business community is not a uniform group of taxpayers.

“We believe simplification should be tailored to different types of firms by creating a far more user-friendly and ‘tax-payer centric’ system. Such a system would recognise that compliance costs faced by companies differ at different stages of their life cycle.”