Small Business Act becomes UK law

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Small businesses are to benefit from new legislation

The Small Business, Enterprise and Employment Act has received Royal Assent and has now become official law in the UK.

Aimed at paving the way for more small business start-ups and entrepreneurs across the nation in the years ahead, the legislation puts in place a range of new provisions that will hopefully help smaller companies innovate, grow and create jobs.

Business secretary Vince Cable commented: "The Small Business Act will create the right environment for small businesses to continue to thrive by giving them greater access to finance to help them innovate and grow, and make it easier for them to export goods and services made in Britain."

There are currently more than five million companies officially classed as small businesses in the UK, but the government is keen to see this number increased in the coming years and the measures put in place under the Act will make this a more achievable prospect.

Exact measures being introduced in the Act include a reduction in red tape by ensuring that regulations affecting businesses are reviewed more frequently, as well as the appointment of a new independent Small Business Appeals Champion.

This individual will have responsibilities to ensure an understandable and effective appeals and complaints process is in place for all firms - but particularly small businesses - when challenging industry regulator decisions.

Meanwhile, access to funding for smaller operators will see a major change in the years ahead, with the opening up of more small business data to non-bank lenders, helping firms to secure loans from operators outside of the traditional financial sectors.

In addition, new 'cheque imaging' technology is to be made more widespread to speed up cheque clearing times for all financial institutions, while any small businesses declined for loans will be able to have their details automatically passed on - with their permission - to alternative financial providers.

Other new measures introduced in the Act include increased support from UK Export Finance for the expansion of smaller firms overseas, as well as a streamlining of public procurement practices to remove barriers that many small businesses feel have stopped them tendering for or being awarded public contracts in the past.

Companies of all sizes will also be subject to a number of changes under the new legislation, with a full-scale banning of exclusivity clauses for zero-hours contract employees, while increased deterrents for firms of breaking National Minimum Wage legislation have been introduced with the power to set the maximum penalty for under-payment in terms of a per worker basis for offenders.

Business minister Matthew Hancock concluded: "Coming from a small business background myself, I know first-hand how cumbersome bureaucracy can stifle your ambitions to grow.

"The Small Business Act is the first set of laws specifically to help level the playing field for small business. There really has never been a better time to start and grow a business in the UK."