The Fresh Start Project has recently produced a paper on the EU and the UK’s micro-business: Constraining What should be Nurtured.

Written by my colleagues Anne Marie Morris and Andrea Leadsom, the report argues that national governments must retain the right to implement their own definitions of what constitutes a micro business. Their preferred approach would see micro businesses in the UK defined as those employing fewer than five people with a turnover of less than £250,000.

They recommend three major policy proposals:

  1. Reduce EU red tape by:
    1. Effectively implementing the SME test, which specifically addresses the potential impact on SMEs of each new EU proposal,
    2. Scrapping the Working Time Directive,
    3. Reducing the cost of compliance with Health and Safety regulation and
    4. Eliminating the gold plating of EU Directives into UK law.
  2. Radically reform taxation for micro businesses by:
    1. Introducing a separate taxation regime for micro businesses and
    2. Broadening the range of goods and services over which VAT can be applied at a reduced rate as a prelude to introducing Graduated Relief on VAT payments.
  3. Improve procurement processes to help micro businesses by:
    1. Getting the UK Government to upgrade its target that 25% of contracts be awarded to MSME businesses from an aspiration to a commitment,
    2. Reviewing de minimis thresholds that allow authorities to avoid tendering for low-value contracts and lowering it if required,
    3. Improving the publication of tenders should, particularly online, so all organisations are aware of what is available and when,
    4. Asking the UK Government to support and fully adopt the forthcoming EU Directive on public procurement to increase the number of contracts it awards to small businesses and
    5. Ensuring that all companies that tender through the public sector sign up to the prompt-payments code.

Fresh Start works with MPs across party lines, along with leading think tanks, interest groups, Lords, MEPs and constitutional experts to examine the options for a new UK-EU relationship, set out what this new relationship could look like, establish a process for achieving change and build political support to make it happen.

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