What do the government's new small business laws mean for you?

The government’s controversial Small Business Bill has begun its passage through Parliament.

The announcement of the Bill, which came during the Queen’s Speech, drew criticism for failing to give detail of the government’s proposals to support small firms. Parliament has now begun to consider the measures in the Bill, which the government claims will help to drive SME growth in the UK.

But what does the Small Business Bill mean for you and your small firm?

Late payment

The Bill recognises that late payment remains one of the most significant problems facing small businesses. However, it stops short of legislating against late payment – a measure that small business groups have long called for.

Instead, the Small Business Bill includes measures to require companies to publish their payment terms, in an effort to shame businesses into paying on time. The Bill includes no financial penalty for late payment, although businesses may still be able to seek compensation under the Late Payment of Commercial Debts Act.

Zero-hours contracts

Zero-hours contracts remain a highly controversial practice, with unions and pressure groups maintaining that they are unfair and are acting to keep working people in poverty.

The Small Business Bill does not ban zero-hours contracts. Instead, if it passes it will ban the exclusivity clause commonly found in these arrangements, which currently mean that workers on zero-hours contracts are banned from working for other employers even when the zero-hours employer is not obliged to give them work.

Cheque clearing

The government says that measures in the Bill will reduce the time it takes for a cheque to clear from six to two days, following the introduction of new technology that will allow firms and individuals to pay in cheques by taking a photograph on their smartphone and submitting it to their bank digitally.

Barclays has already run a pilot scheme using the technology. Its spokesperson Steven Roberts said: “This is an opportunity to move cheques into the 21st Century, to reduce costs, and make banking easier and more convenient for customers.”

Transparency of ownership

The Small Business Bill also includes provisions for further transparency regarding ownership of UK companies. The government will establish a register of beneficial ownership, meaning that owners will be forced to disclose their real identities. The coalition claims that this will also make filing requirements simpler for small firms.

Exporting

The Bill includes a promise that the government will “assist small business expansion overseas by increasing the support available from UK Export Finance and widening its powers, making it easier for businesses, regardless of size, to expand in the international marketplace.”

However, an investigation by the Telegraph has found that despite this promise, in recent months the government has “significantly reduced” support for SMEs wishing to export. As the Telegraph reports, the coalition has cut initiatives including the Passport to Export scheme, and the Gateway to Global Growth scheme, raising questions over the government’s support for SMEs who wish to expand internationally.