Several new pieces of business legislation will come into force in 2006. Clare Barclay, head of small business at Microsoft, advises on how technology can help simplify compliance.
Regulation strikes at two of small businesses' most precious assets; time and money. Every year, the UK government and the European Union pass new bills, adding to the burden of bureaucracy faced by businesses. Whilst regulations like the Data Protection Act are important, dealing with the ever growing mountain of paperwork is a daunting task. But there are ways technology can help simplify and speed up regulatory compliance.
The cost of regulation has shot up over the past eight years. Figures from the British Chambers of Commerce (BCC) show regulations introduced since 1997 have cost UK businesses £30 billion - an increase of 46%. Regulations from Europe make up around 40% of all regulations affecting UK firms, including the Working Time Directive, which the BCC believes is the "single most expensive burden to be placed on business". Whilst these regulations are costly, the examples below show that there are ways of reducing the burden; by using the right technology solution you can reduce the number of administration tasks, saving your business time and money.
Employee regulation
One government initiative that has affected business over recent years is the focus on family friendly policies. Since April 2003, parents with children under the age of six or with disabled children under the age of 18, have had the right to request flexible working. Currently there's no obligation to grant this request, but it must be considered. Under the regulations, employees can request to change the hours they work; change the times when they are required to work; or to work from home for all or part of the week.
Current legislation also allows a statutory period of six months' paid maternity leave to all new mothers and an optional additional six months’ unpaid to those mothers that qualify. Fathers are currently allowed two weeks paid leave. The Work and Families bill will extend maternity pay from six to nine months from April 2007 and will transfer some of this leave and pay to the father.
But, this needn't be a problem. With the right hardware, software and security solution, it's possible for people at home or on the road to connect to your business’s network and access their email and files. This gives employees the flexibility to take time off when they need it most and to catch up when it suits them best, helping them balance their work and home life.
VAT and pay
Financial regulation can be complex, but managed properly, it needn’t cause a headache. For example, you need to register for VAT if your annual turnover is greater than £58,000. Typically, returns are calculated quarterly and consist of deducting your purchases from your sales and then paying the difference to HM Revenue and Customs. Rather than employing an accountant to do this, you can use accounting software to keep track of the VAT you charge and reclaim for you, and then print out the completed form. You can also fill out your tax returns online: www.hmce.gov.uk/business/electronic/evr.htm.
You also need to deduct income tax and National Insurance from employees’ pay and hand it over to the Inland Revenue on a quarterly basis. The administration burden comes in two parts: firstly, forms have to be completed at the start, each following year and at the end of each member of staff’s employment. Secondly you need to work out how much tax and National Insurance to take and pay to HM Revenue and Customs. Many companies outsource this function to a payroll bureau. You can also use payroll software that allows you to add data into a Microsoft Excel spreadsheet. The software prints the relevant forms and submits them electronically to HM Revenue and Customs.
Looking ahead, the Pensions Bill, expected in 2006, will use the Turner Report as its guide and is likely to have far-reaching implications for employers and employees. This is likely to include an increase in the age at which you can retire and might include compulsory saving towards pensions which would be handled by employers.
Protecting your data
Protecting your valuable company data and intellectual property is a vital part of running your business. The Data Protection Act protects the privacy and integrity of individuals’ information held by businesses and other organisations. It ensures they have access to this data and can correct it if necessary. The act applies eight principles to ensure the data is: fairly and lawfully processed; processed for limited purposes; adequate, relevant and not excessive; accurate; not kept longer than necessary; processed within the rights of the individual; secure; and not transferred without adequate protection. The main burden of the act comes if you’re required to register with the Information Commissioner or if you need to respond to requests from the public for access to their records. Although it's unlikely you'll have to register, you can use a tool from the government’s Information Commissioner which includes a checklist for smaller businesses: (http://forms.informationcommissioner.gov.uk/notify/self/question1.html).
Working towards the paperless office
It can be tempting to complain about the burden of government red tape but then forget about the rest of your business processes such as billing, customer management and HR. There are many ways that technology can help streamline your organisation’s administration processes and empty your in-tray at the same time.
No business will ever be form-free – anything from expense claims to recruitment paperwork, from invoices to customer records can slow down you company. Using the right technology to design, circulate, complete and collate forms can smooth the process. Many other processes can be brought online, reducing the amount of time spent on administration by exploiting the full potential of technology that many firms already own.
