SME news in brief: micro businesses, skills gap, IP, trademarks

Are you struggling to get paid?
Are you struggling to get paid?

Self-employed and microbusinesses struggle to get paid

Self-employed and micro-businesses struggling to get paid for their work could be costing the Treasury £800m in sales tax each year.

New research from cloud accounting software provider FreeAgent found that:

  • Based on invoices dated between 1st April 2014 and 31st March 2015, FreeAgent found that freelancers and micro-business owners were on average forced to write off £1,804 from unpaid invoices per year.
  • With a total of 5 million micro-businesses (businesses with 0-9 employees) in Britain and £1,804 being written off per business, this results in a total of £9,020,000,000 (£9 billion) in invoices being written off per year.
  • Based on these unpaid invoices, FreeAgent estimates that an additional £800m sales tax could be lost to the Treasury each year.

FreeAgent CEO Ed Molyneux said: “With the UK home to an estimated 5 million micro-businesses - including 1.8 million freelancers - there’s no longer a ‘typical’ type of worker. Instead, many have chosen to start their own businesses despite not having the traditional protections in place which May Day traditionally seeks to represent.

“One of the biggest issues that these smaller businesses face is getting paid for the hard work that they do. They regularly have to deal with clients paying late, or not at all, and we’ve found the problem is so widespread that these businesses are writing off almost two thousand pounds in unpaid invoices in their accounts each year.”

Business groups call on MP to improve careers advice in schools

Prominent business groups including the Federation of Small Businesses, the British Chambers of Commerce and the manufacturers’ association the EEF have joined experts from academia and the Education and Employers Taskforce in co-signing a letter with Graham Stuart MP calling for a change to the statutory guidance for schools on careers advice.

The letter asks Secretary of State Nicky Morgan MP to amend the statutory guidance so that all schools are required to work to obtain a quality award for careers education, information, advice and guidance that meets an approved standard (or standards) determined by the Department for Education.

The letter states: “The central problem facing careers education is that schools are not incentivised to take careers advice seriously. In our high stakes education system school leaders will understandably prioritise those issues that will lead to serious consequences if they fail to deliver them. Careers advice does not fall into this category.

“Having made it compulsory for schools to meet an agreed quality standard, the appetite for high quality careers provision would leap among school leaders.”

Some trademarks not protected after changes to EU legislation

Brand owners need to be aware that recent changes to EU trade mark legislation could leave some trademarks with a reduced scope of protection.

According to trade mark attorneys at Withers & Rogers LLP, brands need to take action to address this within the next six months, or risk being left with narrower intellectual property (IP) rights than they originally sought.

Up until June 2012, EU trade mark laws allowed goods or services to be protected in trade mark registrations by using a "class heading", a short summary of the general nature of the goods/services in the class. The use of this class heading alone would ensure that all of the goods or services belonging to that same class were covered. With the incoming EU reforms however, it will no longer be possible to interpret class headings in this way, and brands will need to provide a comprehensive list of what the trade mark should cover.

As of 23 March 2016, companies have six months to submit amendments to their EU trade marks. Those with registrations covering class headings in Class 12 (vehicles), Class 7 (machines) and Class 10 (medical products) are particularly at risk. These registrations would respectively no longer cover vehicles, machine parts, or products for babies.