News in brief: freelancers; exporting; patents; finance

News in brief
News in brief


Freelancers’ confidence levels reach all-time low

New research from IPSE shows freelancers’ confidence is at an all-time low. The Freelancer Confidence Index, conducted by IPSE in association with Upwork, recorded its first ever negative index score in relation to the outlook for freelancers’ business confidence over the next 12 months.

IPSE found more than a quarter (28%) of freelancers were confident in their business performance improving in the next 12 months. This is significantly lower than the second quarter of 2015, when 41% were confident.

The top two factors cited as negatively affecting confidence levels are related to changes in public policy, namely government attitudes towards freelancing and regulation. IPSE is concerned proposed changes to travel and subsistence tax relief, increased taxation on dividends and potential tightening of ‘IR35’ tax rules have led to this drop in confidence.


Inquiry launched into exports and the role of UKTI

The Business, Innovation and Skills Committee has launched an inquiry looking at exports and the role of UK Trade and Investment (UKTI).

The inquiry will examine:

• What policies are required to help meet the Government’s headline targets of £1 trillion exports and 100,000 more companies exporting by 2020?
In particular, what further support should be provided to help SMEs meet their export potential?

• Is UKTI fit for purpose? Are the indicators used to measure its performance the right ones? How could UKTI be better held to account?

• What UKTI activities are most effective at increasing exports? What more could it do?

• What more can other bodies, such as the banks and UK Export Finance, do to provide financial assistance to companies seeking to export?

Commenting on the announcement, national chairman for the Federation of Small Businesses John Allan said: “The government has set ambitious targets to boost UK exports by 2020 and the FSB wants small businesses to play a key role. This Select Committee inquiry is a timely opportunity to assess what more UKTI can do to improve support for small firms, particularly ahead of any new announcements in the Chancellor’s Comprehensive Spending Review.

“Schemes that work such as 'Open to Export' must be protected. We would also like to see the greater powers promised for the British Business Bank (BBB) in the Government’s productivity plan delivered as soon as possible, to overcome the finance challenges facing small businesses looking to export. And crucially, the help and support needs to be available to businesses of all sizes - not just fast growth firms and digital start-ups.”

Consultation launched on the Patent Box Scheme

The government has launched a consultation on the Patent Box Scheme, which will essentially ensure the UK’s tax regimes comply with the Organisation for Economic Cooperation and Development’s (OECD) recommendations.

According to intellectual property firm Withers and Rogers, the consultation is a positive step as it will allow UK companies to plan their future with more certainty. Patent lawyer at Withers and Rogers Michael Jaeger said: “The government has now made its position on the Patent Box Scheme clear, which is very important for UK businesses and innovation. This should remove any doubt for companies who undertake their R&D activity in the UK, allowing them to receive the same level of tax relief on patented technologies.”


Record amount of capital raised through EIS scheme

UK small businesses raised a record £1.53bn through the Enterprise Investment Scheme (EIS) in 2013/14, a 48% increase on the £1.03bn raised the previous year, according to Radius Equity, a provider of tax-efficient private equity investments.

New data shows 2,770 SMEs raised funds through the EIS scheme, 12% more than the 2,470 who used the scheme last year. Radius Equity says that the surging popularity of EIS is helping to provide investment for UK SMEs at a time when many are struggling to secure traditional bank lending.

Director at Radius Equity Gary Robins commented: “Investment on this scale is helping to drive growth in SMEs across the UK economy. EIS is becoming an increasingly valuable source of capital, especially as bank lending can still be difficult to secure.”

“This capital raising is important to ensure SMEs continue to be a strong engine for economic growth in the UK. They employ a huge number of people while stimulating local and regional economic development.”

More SMEs turning to asset-based finance

The value of small businesses’ unsold inventory has reached the £50.9bn mark, up 4% in a year from £48.8bn in 2014, according to research by the Asset Based Finance Association (ABFA). The ABFA explains that growth in SMEs’ unsold inventory has accelerated in the last year, as a result of the economy not expanding as quickly as some had hoped after the recession.

Businesses facing issues with large amounts of unsold stock can ensure that it does not become too much of a burden on resources by using it to secure an innovative form of finance. Chief Executive of the ABFA Jeff Longhurst explains: “Many UK SMEs have found themselves sitting on large amounts of unsold stock after the recession – but businesses can still extract a lot of value from this inventory by using it as collateral and therefore lower their cost of borrowing.”

“An unexpectedly large inventory can act as a drain on cash flow, but more businesses facing this problem need to be aware that it can also unlock access to finance that may previously have been out of reach.”