Protection of Small and Medium Enterprises in UK

28th November, 2022 - 7:41 am Categories: Protection of SMEs 0 Comments

Introduction

The UK government defines SMEs as companies with fewer than 250 employees and an annual turnover of less than €50 million. Microbusinesses are those with fewer than 10 employees and an annual turnover of less than €2 million. Small businesses have fewer than 50 employees and an annual turnover of less than €10 million. Since 2010, the government has introduced a number of programmes intended to advance our economy and increase SMEs’ access to public procurement. The government’s goals have primarily focused on encouraging SME-friendly procurement procedures and increased engagement. By reinforcing the participation of SMEs, these goals and activities have been strengthened and improved by the Public Contracts Regulations of 2015.

[Image Source: Shutterstock]

More than one-third of small and medium-sized businesses (SMEs) choose protection insurance to protect their corporate debt. According to the study, 39% of SMEs used insurance policies as collateral for their loans. And even though 75% of UK SMEs have some kind of external corporate debt, more than half of them have a good financial outlook. In order to be in the best possible position to present thoughtful propositions that can close existing protection gaps, 97% of SMEs said they are looking for professional advice.

Environmental legislation must offer a higher level of protection for the environment in order to be effective. This is acknowledged by the EA in its Compliance Classification Scheme (CCS), which categorises risk levels depending on their potential environmental impact (although environmental damage does not necessarily have to occur). The EA Common Incident Classification Scheme (CICS), which categorises incidents based on their real environmental impact, runs concurrently with this. Risk assessment is important since it determines the severity of the regulations that regulatory agencies will implement.

The government’s SME target for 2019–2020 was 33%, thus the authorities were happy that DIT spent 34% of its budget on SMEs. The Action Plan aims to make our procurement processes more SME-friendly and to collaborate with SME partners to support their growth. In addition to helping the nation’s SMEs, the experts are also creating procedures and policies to support inclusion and diversity in their supply chains. The authorities attempted to lower barriers for anyone desiring to become a trading partner of DIT through “meet the buyer/supplier” events and increased usage of webinars.

DIT promotes free trade, encourages inward and outward investment, assists companies with exporting, and negotiates market access and trade agreements. It is an international economic department charged with combining policy, promotion, and financial expertise to remove obstacles to trade and investment in order to support business success; delivering a new trade policy framework for the UK as the department leaves the European Union; promoting British trade and investment throughout the world; and increasing the demand for British goods and services on a global scale. Over 100 markets throughout the world offer the department’s services. By giving their businesses access to new markets and new processes, technologies, and better suppliers, their effort helps productivity and our economy. People’s living standards rise as a result of having more options at reduced costs. Equally as important, the department’s work advances prosperity, commerce, and foreign investment while also strengthening the UK’s position as a world power.

In accordance with the SME Agenda, DIT has set an overall goal of 33% of spending going to SMEs. This is consistent with the government’s general SME objective. DIT has a good foundation when it comes to SME spending. The department’s SME spend is primarily driven by their larger contracts, so it presents difficulties in maintaining this performance over time. DIT has made investments in its capacity and ability to implement commercial policy, and it has also put a strategy into place across the Commercial Directorate to support more SME monitoring and involvement in the department’s procurements. Along with adhering to its guiding principles, this approach will assist the professionals in upholding their levels of performance and the department’s objective for growing and securing DIT’s place as one of the top spenders on SMEs in the federal government. The department would help SMEs in providing vital services to UK businesses and the economy through the three essential tenets of our SME strategy—”transparency & accountability,” “access to opportunities,” and “capacity & awareness.” This would allow SMEs to continue competing in our competitions.

Graham Stuart, MP, the DIT’s Minister for Exports, is in charge of making sure that SME participation is allowed in all DIT supply chains. To ensure ongoing engagement on progress, Minister Stuart will have and has held regular meetings with DIT’s Commercial Leadership and SME Champion. All Commercial Directors were approached by John Manzoni, the Chief Executive of the Civil Service and Permanent Secretary, in 2018 to request that each department have its own SME Action Plan. In response to this request, DIT created this Action Plan, which aims to continuously increase SME spending and supply chain inclusion through 2022. By the end of March 2021, DIT has developed and embedded an internal SME commercial policy, aligned to this Action Plan, which sets out DIT’s procurement standards for SME inclusion and accessibility within our supply chains.

Conclusion

However, a large number of organisations and authorities in the UK decide to adhere to their own definitions of SMEs and conduct all the statistics and analysis based on the meaning they outlined. The balance sheet total and the company’s turnover may both be taken into consideration when estimating the size of the business. For instance, the Bank of England and the British Bankers Association (BBA) define SMEs as those with a principal business account that generates less than £25 million in annual revenue. The BBA goes one step further and defines small firms as those with an annual revenue of less than £1 million or £2 million. By 2022, the UK government intends to invest £1 in every £3 it spends working with SMEs, either directly or through the supply chain. The government supports SMEs through HMRC, or HM Revenue and Customs, which is in charge of collecting funds to pay for the nation’s public services as well as taxes.

Author: Tanya Saraswat, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.